Air transport

Ita Lufthansa, last round in Brussels to unblock the merger

The EU Commission has not yet taken a decision on Ita-Lufthansa and negotiations on the latest proposals put on the table by the parties continue 'to the last'.

Lufthansa presenta offerta per una partecipazione in Ita Airways. Il Gruppo "ha presentato una lettera di intenti al Ministero dell'Economia e delle Finanze italiano", si legge in una nota in cui si sottolinea che "qualora entrambe le parti decidano di firmare il memorandum d'intesa, ulteriori negoziati e discussioni saranno condotti su base esclusiva". La proposta riguarda inizialmente una quota di minoranza. ANSA

3' min read

3' min read

Last round in Brussels to unblock the Ita Lufthansa merger. The EU Commission has not yet taken any decision on Ita-Lufthansa and negotiations on the latest proposals put on the table by the parties are continuing 'to the last'. This is according to EU sources close to the dossier. Brussels, as already anticipated, aims to decide by next week. The announcement of the verdict is, however, expected between the end of June and the beginning of July, a few days before the 4 July deadline. In the last few days there has been 'some progress' but, according to the same sources, 'some knots' remain to be solved in order to ensure the protection of competition.

In recent days, Lufthansa and the Ministry of the Economy have proposed new sacrifices to the EU to save the agreement to sell the Italian company to the German carrier. In the never-ending correspondence between Rome, Frankfurt and Brussels, a new letter with further cuts in flights and routes was issued to appease the severity of Competition Commissioner Margrethe Vestager.

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Flights in Europe

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The hottest chapter in the confrontation with the EU antitrust authority concerns flights to Central Europe from Milan Linate. In the latest 'remedy offer' package, i.e., the offer of sacrifices, Lufthansa as buyer and the Mef as seller - confirm authoritative sources close to the dossier - declare themselves willing to sacrifice at least 15-17 daily slot pairs held by Ita at the Milan airport, i.e., hourly windows entitling them to make 15-17 landings and as many take-offs, equal to 30-34 aircraft movements. Sources at the Mef have confirmed that responses to the latest findings by the EU body have been filed and there are no requests for a postponement of the EU decision, which is expected by 4 July.

The proposed cuts

Lufthansa together with the Mef had previously put on the table a reduction of 11 slot pairs at Ita, i.e. 22 aircraft movements. This is therefore a 50 per cent increase in the sacrifices offered, amounting to about 10 per cent of the maximum daily air movements allowed at Linate. Traffic at the airport is restricted, no more than 18 movements per hour.

Smaller sacrifices are expected at Rome Fiumicino. Lufthansa and Mef would give up about ten slot pairs at Italy's main airport. There is no congestion problem at Rome as at Linate, but overlapping slots between the two companies would be eliminated.

The space that would be freed up by giving up these slots would be used to open up to competitors the routes from Linate and Rome to Germany, Austria, Switzerland and Belgium, the countries where Lufthansa is dominant either directly or through its subsidiaries Austrian, Swiss, Sn Brussels.

The competitors' request

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Brussels has demanded that, in addition to freeing up slots, Lufthansa and Ita identify competitors to take over the vacated routes. For this, Ita has already signed preliminary agreements with Volotea and easyJet, while according to rumours, Hungary's Wizz Air could also enter.

The letter also mentions long haul. The EU considers the Ita-Lufthansa merger to be dominant because the Italian company's flights to North America would be added to those of Lufthansa's A++ transatlantic joint venture with United and Air Canada. The German carrier and Mef confirm the proposal to keep Ita's transatlantic activities separate from those of the jv between Lufthansa and Allied, for two years. "No more than two years, otherwise Ita would suffer very serious damage," said a source familiar with the dossier.

In addition, for long-haul, Ita's willingness to make 'interline' commercial agreements is given to allow Lufthansa's major competitors, Air France-Klm, British Airways and Iberia, to connect flights from Italy with long-haul flights from their hubs. Ita convened the unions for 11 June. This year the company aims to hire 475 people, 90 of them pilots.

The scenario

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The CEO of Aeroporti di Roma, Marco Troncone, said that traffic is growing strongly: 'The summer season is going extremely well. Rome confirms itself as a very attractive and magnetic market at a global level. We are still experiencing a remarkable 20% growth compared to last summer season, which was very successful. We are the fastest growing airport in Europe'.

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