Lufthansa, ITA Airways deal may hurt competition, EU watchdog says
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Lufthansa’s bid for a minority stake in Italian rival ITA Airways could harm competition and lead to higher prices, EU antitrust regulators said on Monday, ramping up pressure on the German carrier to come up with stronger remedies.
“A risk of a competition issue is of course that prices go up and services go down,” EU Commissioner Margrethe Vestager told reporters. “That is what we mean when we say risk to competition: that users will have to pay,” she added.
The European Commission said the deal threatened competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes between Italy and the United States, Canada and Japan. It would also strengthens ITA’s dominant position at Milan’s main airport.
“The routes giving rise to potential concerns represent a small share of total short- and long-haul routes and passengers served by both parties and their joint venture partners, and the potential concerns do not affect the vast majority of routes that ITA operates,” it added.
Lufthansa wants to buy a 41% stake in state-owned ITA for 325 million euros ($351 million) as part of a capital increase.
The deal highlights the airline industry’s attempts to consolidate, with British Airways-owner IAG seeking to buy out Spain’s Air Europa.
The German group said it would present remedies to the Commission “in a timely manner”, adding that – in the company’s view – the deal would strengthen competition in Europe and in Italy.
