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EU gives its approval, Lufthansa's huge business is coming

EU gives its approval, Lufthansa's huge business is coming

After ceding routes and slots to rivals, Lufthansa received EU antitrust approval on Wednesday. It buys 41 percent of Italy's ITA Airways for €325 million (around HUF 130 billion).

Alitalia, ITA's predecessor, has been plagued by financial difficulties and bailouts for decades. Lufthansa is likely to need significant investment to rebuild the Italian airline – He writes Reuters.

If ITA's financial performance improves, Lufthansa will have the opportunity to buy a majority stake in the airline.

Allowed methods

The European Commission has demanded serious concessions from the German airline so that the deal does not have a distorting effect on competition. Lufthansa and Italy have agreed to cede Italian short-haul routes to one or two competitors.

Following the acquisition, the combined company will also enter into so-called slot swaps with competitors on long-haul routes to Increase flight frequency and improve aircraft connectivity with one stop.

The German airline said it was in talks with easyJet and Spanish low-cost carrier Volotea.

Lufthansa can only complete the deal if competitors start operating the routes.

Increased costs, greater volume

Lufthansa faced higher labour costs due to strikes at the beginning of the year.

The deal is one of three high-profile European airline deals, underscoring airlines' drive to expand to offset rising operating costs.

European regulators are concerned that the region's three largest airline groups – IAG, Air France, Lufthansa – Become too dominant, which could reduce consumer choice and affordability of flying.

The European Court of Justice is currently investigating British Airways owner IAG’s bid to buy Air Europe. The commission will also assess Air France’s bid to acquire a 19.9 percent stake in Scandinavian airline SAS.

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