Lufthansa’s bid for ITA Airways stake faces EU scrutiny

Brussels has opened an in-depth probe into Lufthansa’s purchase of a minority stake of Italy’s ITA Airways on competition concerns, in the latest example of airline consolidation facing post-pandemic regulatory hurdles. Regulators said on Tuesday that they were worried that the deal “may reduce competition in the market for passenger air transport services on several short-haul and long-haul routes in and out of Italy”. It comes after Lufthansa agreed to take a 41% stake in ITA Airways, the successor company to Alitalia, the now-insolvent flag-carrier back in May. The deal allows Lufthansa to eventually buy up to 100% of the Italian carrier. The EC said that initial concessions to avert an in-depth probe were not enough to appease these worries. Lufthansa said it “will continue to work vigorously for a swift conclusion of the EU Commission’s review and for the subsequent implementation of the investment”. ITA Airways did not immediately reply to a request for comment.  People close to the talks between Brussels, Lufthansa and Rome said the German carrier offered to give up certain airport slots at Milan Linate, but the EU asked for further concessions on the number of Lufthansa’s flights from Europe to the US. “It is a very onerous ask,” one of the people said.  The expansion of ITA’s long-haul offering is one of the pillars of its turnaround strategy, with the US representing one of the main target markets. Europe’s three biggest long-haul airlines have engaged in a burst of deal making as the aviation industry emerges from the disruption of the coronavirus pandemic.  British Airways owner IAG in February last year agreed to buy the 80% of Spain’s Air Europa it does not already own for about E400m.<br/>