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Lufthansa (LHAG.DE) secured EU antitrust approval to acquire 41% of ITA Airways for 325 million euros ($350 million), enhancing its presence in the lucrative southern European market. This move, which required Lufthansa to cede routes and slots, also boosted shares of rival IAG, raising hopes for its acquisition of Air Europa. Lufthansa CEO Carsten Spohr highlighted that ITA's Fiumicino airport hub offers better access to Africa and Latin America and presents significant growth opportunities. Following the announcement, Lufthansa's shares rose by 3.27%, while IAG's shares increased by 4.6% as the approval bolstered confidence in airline mergers and acquisitions.
- The deal includes long-haul routes and the option for Lufthansa to take full ownership of ITA if its financial performance improves. To address competition concerns, Lufthansa and ITA agreed to cede Italian short-haul routes to rivals, and they are in discussions with EasyJet (EZJ.L) and Spanish low-cost carrier Volotea. They will also transfer slots at Milan's Linate airport to competitors and provide better connections at key North American hubs. EU antitrust chief Margrethe Vestager stated that the proposed remedies ensure sufficient competitive pressure on relevant routes. The deal, seen as the best option for ITA and Italy, will proceed once rivals start operating the routes.
Why it matters
This acquisition highlights the ongoing consolidation in the European airline industry and its potential impact on competition and consumer choice.
