Lufthansa to Make Fresh Concessions in 325 Million Euro Investment in Italian Airline ITA Airways
Lufthansa is expected to offer new concessions to European Union regulators for its planned 325 million euro investment in Italian airline ITA Airways, according to the Italian government. This follows a meeting between Italian Finance Minister Giancarlo Giorgetti and EU Competition Commissioner Margrethe Vestager in Brussels. The new offer is a revision of a proposal Lufthansa made on April 11, which the German airline called a "comprehensive and constructive solution," but one that failed to address competition concerns.
Key Takeaways
- Lufthansa to offer new concessions to EU regulators for $325M investment in ITA Airways
- Offer is a revision of Lufthansa's previous proposal on April 11
- Previous proposal was deemed insufficient in addressing competition concerns
- New concessions expected after meeting between Italian Finance Minister Giancarlo Giorgetti and EU Competition Commissioner Margrethe Vestager
- Lufthansa's initial offer was criticized for not alleviating regulatory issues
Analysis
Lufthansa's new concessions aim to address EU competition concerns over its $325M investment in ITA Airways. The earlier proposal was criticized for falling short in alleviating regulatory issues, affecting not only Lufthansa and ITA Airways but also European aviation. This development might also impact the European Union's competition policy and its evaluation of mergers and acquisitions in the aviation sector. In the short term, Lufthansa's revised offer aims to secure the investment approval of EU regulators. However, the long-term consequences might include closer scrutiny of similar deals and stricter competition policies in the aviation industry. Margrethe Vestager's role in these negotiations highlights the European Commission's growing influence over cross-border business activities within the EU.
Did You Know?
- ITA Airways: ITA Airways is the successor to Alitalia, the former flag carrier airline of Italy, which went bankrupt in 2017. ITA Airways began operations in October 2021, with the aim of revitalizing Italy's aviation industry.
- Lufthansa: Lufthansa is a German multinational airline company and the largest airline in Europe in terms of passengers carried. It operates services to 197 destinations in 78 countries, and is the parent company of several other airlines, including Swiss International Air Lines, Austrian Airlines, and Brussels Airlines.
- EU Competition Commissioner: The EU Competition Commissioner is a member of the European Commission responsible for enforcing European Union competition law, which includes regulating mergers and acquisitions, and preventing anti-competitive practices. Margrethe Vestager is the current EU Competition Commissioner, and has held the position since 2014.