The marriage between ITA and Lufthansa has finally received the green light from the EU Commission, which was pushing for some changes in the routes to respect competition. What changes now?
The ITA-Lufthansa merger has received the green light from the EU Commission for the German giant’s plan to enter the newco born from the ashes of Alitalia.
The project, after a path full of obstacles, intends to create a competitive European company in the national and international flight sector. Precisely due to the scope of the plan, the EU had expressed doubts about respect for competition, calling on interested parties to make some changes to the plan.
Specifically, the slots at Milan Linate ended up in the sights of the European Antitrust, considered excessive; dominance on some short-haul routes between Italy and Germany, Austria, Switzerland, and Belgium, and little competition on routes to North America.
The proposals of Italy’s Ministry of Economy (MeF) - which so far holds 100% of the newco - and Lufthansa to adapt to compliance with free competition as indicated by the EU have finally been accepted. What happens now and what changes for the ITA and Lufthansa company?
ITA-Lufthansa, green light from the EU. The details
The EU Commission has finally turned the green light on the operation between ITa and Lufthansa.
As stated in the official note, the European executive arm has approved, “pursuant to the EU merger regulation, the project for the acquisition of joint control of Ita Airways by Deutsche Lufthansa AG and the Italian Ministry of Economy and finance. The approval is subject to full compliance with the corrective measures offered by Lufthansa and the Mef”.
In practice, the two companies involved have undertaken to:
- transfer 15-17 pairs of slots (equal to 30-34 daily return flights) to Linate;
- guarantee the entry of one or two rival companies into non-stop flights for a minimum period - three years - on intra-European routes in which ITA and Lufthansa were monopolists;
- identify a rival on direct intercontinental connections (Chicago, Washington, San Francisco, Toronto) or choose for each route two other companies that can offer flights with a stopover of no more than 2 hours and a total flight time of no more than 3 hours longer than the direct one
These competition guarantee conditions must be implemented within four months. Only then can the closing of the entire operation take place.
What will be the next steps of the ITA-Lufthansa plan?
The German company will first have to make its entry into ITA with a capital increase of 325 million euro, acquiring 41% of the Italian airline. This way, he will be a minority shareholder but will be able to assume joint operational control and launch the appointment of the CEO of Ita and another member of the Board of Directors.
Subsequently, Lufthansa will be able to reach 90% share and, finally, also take over what remains, 10%, by 2033. The total investment would thus rise to 829 million euros. At the moment, however, the German company has not expressed any rush to completely take over the shareholding of the Italian Government (via the Mef).
Original article published on Money.it Italy 2024-07-03 15:27:20. Original title: ITA-Lufthansa, arriva la promozione Ue. Cosa succede adesso?
