EU antitrust regulators warned yesterday that Lufthansa’s intention to buy a minority stake in ITA Airways could harm competition and push up prices, prompting Italy and the German airline to come up with remedies in the coming weeks.
Lufthansa’s plan to buy a 41 per cent stake in state-owned ITA for 325 million euros ($351m) underscores sector consolidation alongside British Airways-owner IAG’s bid to buy out Spain’s Air Europa.
The European Commission warned that the Lufthansa and ITA deal could leave users short-changed as it set out its concerns in a charge sheet known as a statement of objections.
“A risk of a competition issue is of course that prices go up and services go down,” European Union Commissioner Margrethe Vestager told reporters. “That is what we mean when we say risk to competition: that users will have to pay,” she added.
The EU antitrust watchdog said the deal threatened competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes between Italy and the United States, Canada and Japan.
It would also strengthen ITA’s dominant position at Milan’s main airport, confirming a Reuters story earlier this month.
The Commission said, however, that its worries focused only on a small number of short and long-haul routes and passengers served by both airlines and their joint venture partners.
“The potential concerns do not affect the vast majority of routes that ITA operates,” it added in a statement.