Ita Airways, Lufthansa threaten withdrawal to the EU Commission
Lufthansa expects to receive an EU antitrust warning in the coming weeks over its bid for a minority stake in ITA Airways and is ready to offer targeted remedies to resolve competition problems, Reuters claims. The German carrier is seeking a 41% stake in its state-owned Italian rival for 325 million euros ($351.4 million) as part of a capital raise.
The European Commission opened a full-scale investigation into the deal in January, fearing that the acquisition could reduce competition in passenger air services on several short- and long-haul routes. LThe EU competition authority will also examine whether ITA, Lufthansa and its joint venture partners United Airlines and Air Canada should be treated as a single entity after the merger.
Lufthansa expects a statement of objections from the Commission explaining these concerns in more detail in mid-March. Also because, as Repubblica explains, the German giant has already indicated that if the conditions and costs are considered excessive, the only option will be to withdraw from the deal.
According to Reuters, the potential remedies could echo those under the agreement between Korean Air and Asiana, which was cleared by the Commission only after giving up slots, traffic and aircraft rights to allow a competitor to operate on four overlapping routes.