The EU Commission has approved Lufthansa's acquisition of the state-owned Italian airline ITA Airways.

The airline is currently doing well. However, its long-term existence as an independent airline is "highly uncertain" without the transaction. The EU Commission also announced on Wednesday that approval was dependent on the airlines fulfilling conditions to safeguard competition.

After years of efforts, Lufthansa has thus achieved its goal of growing in Italy - its second most important market after the USA. ITA, which emerged from the chronically loss-making state-owned airline Alitalia four years ago in a reorganized and shrunken form, is to become the seventh airline subsidiary outside Germany to benefit from Lufthansa's large network. At the end of May 2023, Lufthansa agreed with the Italian government to purchase an initial 41% stake in ITA for 325 million euros. Options for a full takeover at a later date were also agreed.

The EU competition authority's decision was preceded by a long tug-of-war between the Commission's experts and the Italian government as well as Lufthansa. EU Competition Commissioner Margrethe Vestager had major concerns that the merger could be disadvantageous for consumers due to a reduced offer and higher ticket prices. This is now to be avoided by imposing conditions on Lufthansa and ITA - including the transfer of take-off and landing rights at Milan Airport for direct flights in Europe. Lufthansa and ITA are to ensure that there is still sufficient competition on short and long-haul routes through agreements with competing airlines.

(Report by Ilona Wissenbach, edited by Myria Mildenberger. If you have any queries, please contact the editorial team at frankfurt.newsroom@thomsonreuters.com)