Lufthansa’s attempt to secure a minority stake in ITA Airways could cause harm to competition and in turn cause a surge in prices, EU antitrust regulators said on Monday. The announcement will also increase pressure on the German airline to come out with better solutions.
According to a Reuters report, EU Commissioner, Margrethe Vestager, while addressing the media, said, “A risk of a competition issue is of course that prices go up and services go down. That is what we mean when we say risk to competition: that users will have to pay.”
The EU further said that the deal posed a threat to competition on shorter routes between Italy and the Central European nations, along with longer destinations on the routes between Italy and the US, Canada, and Japan.
The regulatory body noted that the deal will also strengthen the Italian carrier’s dominant position at the main airport in Milan. “The removal of ITA as an independent airline may have negative effects on competition in these already concentrated markets,” the Commission said.
The body further noted, “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.”
Now, Lufthansa and ITA Airways will have till April 26 to submit new remedies. Notably, the German airline is trying to purchase a 41 per cent stake in the state-owned Italian airline for $351 million or €325 million as part of a capital rise.
Lufthansa said that it will be presenting solutions to the Commission and the deal will help strengthen the competition in Europe and Italy. “We remain confident that ITA will become part of the Lufthansa group family this year,” it said via an official statement.
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