The deal signifies a strategic move for Lufthansa to strengthen its foothold in the Italian aviation market, which has been historically challenging due to the legacy of Alitalia's financial struggles.
The Italian government's firm stance against price reductions reflects a broader trend of national interests prioritizing the stability and integrity of their national carriers in the face of foreign acquisitions.
The approval process by the European Commission highlights the ongoing scrutiny of airline mergers and acquisitions, particularly in maintaining competitive markets within the EU.
If the European Commission approves the deal as expected, Lufthansa could significantly enhance its operational capabilities in Italy, potentially leading to increased competition in the European airline market.
The successful acquisition may set a precedent for future airline mergers in Europe, encouraging other national carriers to seek strategic partnerships or acquisitions to bolster their market positions.
With Lufthansa's entry into ITA Airways, there may be a shift in pricing strategies and service offerings in the Italian market, benefiting consumers with more choices and potentially lower fares.
Lufthansa and the Italian government have finalized an agreement for the acquisition of ITA Airways, marking a significant step in the airline's transition from its predecessor, Alitalia. The deal was officially signed just before the European Commission's deadline, with both parties submitting a package of remedies aimed at ensuring competition in the airline market. The Italian Ministry of Economy expressed confidence in receiving the European Commission's approval, which is crucial for the deal's finalization.
The agreement allows Lufthansa to acquire a 41% stake in ITA Airways for 325 million euros, with an option to increase its stake to 100% in the future. This acquisition is expected to enhance Lufthansa's presence in the Italian market, which is the third largest in the EU. Despite earlier negotiations where Lufthansa sought a discount on the purchase price, the Italian government firmly rejected this request, emphasizing that it would not 'sell off' its airline.
The European Commission had previously opened an in-depth investigation into the deal, concerned about potential reductions in competition on various routes. The remedies proposed by Lufthansa and the Italian government include transferring airport slots to other carriers to maintain competitive balance. The Commission is expected to issue a final decision by the end of November, with Lufthansa's full entry into ITA Airways anticipated in early 2025.
