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Lufthansa Group CEO: “ITA Airways Deal Might Close This Week”

Carsten Spohr is optimistic that the deal will close this week as the European Union readies for its upcoming elections in June

by Enrique Perrella

June 4, 2024

Photo: Courtesy of ITA Airways

The acquisition process of Lufthansa-ITA Airways may soon reach a conclusion. Carsten Spohr, CEO of the Lufthansa Group, informed reporters at the IATA Annual General Meeting that the European Commission’s decision on acquiring the Italian carrier by the German conglomerate might be announced this week as Europe prepares for its upcoming elections scheduled for June 6.

The German group—which owns Lufthansa, SWISS, Austrian Airlines, Brussels Airlines, Eurowings, and Air Dolomiti—hopes to conclude the lengthy negotiations to include the Italian carrier in its broad portfolio of European airlines.

In November 2023, Lufthansa agreed with the Italian Economic Ministry to buy 41 percent of the airline shares for €325 million, potentially increasing its ownership to 100 percent.

Photo: Lufthansa Group’s CEO, Carsten Spohr. Courtesy of Oliver Roesler / Lufthansa.

At the time of the announcement, Spohr said this is “good news for Italian consumers and Europe because a stronger ITA will invigorate competition in the Italian market. As a young company with a modern fleet, and with its efficient and expanding hub in Rome, ITA is a perfect fit for Lufthansa Group.”

However, the European Commission expressed concerns about the transaction, stating that Lufthansa’s influence in Europe would become too dominant, potentially leading to anti-competitive practices.

The Lufthansa Group—already the world’s third-largest airline conglomerate—would expand by adding over 90 aircraft to its fleet and gaining a major hub in Southern Europe. Italy has the third-largest economy in Europe by gross domestic product. Its export-oriented strength makes it an important hub for business travel. Additionally, as one of the world’s most desirable leisure destinations, Italy also attracts private travelers, further emphasizing its significance in international tourism.

Photo: Lufthansa Group airlines. Courtesy of Lufthansa

As a result, the European Commission has requested that both Lufthansa and ITA Airways divest certain assets to address the perceived anti-competitive issues.

According to the German CEO, the integration of ITA Airways into the Lufthansa Group should take up to 18 months if given the green light. “We have been working with them closely for a long time now. All we are waiting for is the green light from the authorities,” he told Business Traveler.

Spohr highlighted the importance of the upcoming decision by the European Commission regarding the proposal. He expressed optimism about the likely outcome despite the prolonged deliberation process.

When asked about potential obstacles, Spohr expressed concerns about the negative impact of prolonged decision-making on ITA Airways, stating, “Every day that passes without a strong partner is bad for ITA Airways.”

Photo: ITA Airways, Airbus A330-900neo. Courtesy of ITA Airways.

The German CEO acknowledged the case’s complexity, noting that reaching a consensus has taken longer than initially anticipated. He said the decision was expected on July 4, “but I anticipate the European Commission will decide on the case within this week,” he said. “I believe that the Italian government and the Italian voters are waiting for the opinion before the European elections.”

German Hub in Rome

“Beyond an Italian carrier, we’re happy to get an important hub in the South of Europe,” said Spohr, noting that Rome Fiumicino will be a crucial addition to the group’s network structure for regional and long-haul flights.

Spohr revealed that the negotiations have taken longer than expected, as the European Commission is asking for some guarantees in Milan Linate — one of Europe’s jewel airports — and the airline’s participation in the North Atlantic between the U.S. and Italy.

Rome Fiumicino Airport Terminal lounge / Photo: Alina La Cat/Shutterstock

According to Leonard Berberi, an Italian journalist with Corriere della Sera, the European Commission is opposed to ITA Airways joining Lufthansa in its Transatlantic Joint Venture with United Airlines and Air Canada. Spohr was vocal about this, saying that there would be no sustainable future if ITA Airways were left alone to compete against United, Delta, and American Airlines. In addition to the three U.S. carriers, Emirates operates daily flights between Dubai and New York, with a stop in Milan, using an Airbus A380.

For this reason, delegations from Italy and Germany are meeting in Brussels for final discussions to resolve the outstanding issues delaying the approval process as they await the nod from the E.U. Antitrust Commission, hoping to find a consensus fitting all parties.