EU Approves Lufthansa's Conditional $350 Million ITA Deal

Lufthansa has secured EU antitrust approval to acquire a 41% stake in Italy's ITA Airways for 325 million euros ($350 million). The transaction, aimed at expanding Lufthansa's presence in the southern European market, comes with several conditions to address competition concerns. The German airline has agreed to cede some of ITA's short-haul routes and slots, particularly at Milan Linate airport, and to support rival services on transatlantic routes. Additionally, interlining agreements or slot swaps with competitors will be implemented to enhance frequencies and improve connections for one-stop flights.

This acquisition is one of three significant airline transactions in Europe designed to boost scale amid rising operating costs. Lufthansa also retains an option to take full ownership of ITA Airways if the airline's financial performance improves. The European Commission's approval follows an in-depth investigation to ensure the deal would not harm competition, resulting in a package of commitments to preserve fair competition on key routes from Italy to Europe and North America. The Italian finance ministry is also contributing 250 million euros as part of a capital increase in ITA Airways.