Lufthansa offers EU slot cut for Ita deal OK

Openings from Deutsche Lufthansa to the European Union's Competition DG, which is examining the dossier on the German group's entry into 41% of Ita Airways through a 325 million euro capital increase. In the offer there is talk of giving up slots and routes at Milan Linate where, if the operation goes through, Lufthansa with its partners (the network that includes Austrian, Brussels Airlines and Swiss), together with Ita would have a significant position that could compromise the free competition of other airlines, according to a European Commission document published in December, the day after the notification to Brussels on 30 November.

The news, reported by Bloomberg, had been circulating for a few days according to sources following the dossier in Italy, while from Lufthansa came the 'no comment' - without, however, any denial of the news - nor did any comment come from the European Commission. This is no coincidence, considering the imminent deadline of 15 January, when according to the ordinary procedure (the so-called 'phase one') the 25 working days from the notification would have expired for the pronouncement by the European Commission's Competition DG . But the Minister of the Economy, Giancarlo Giorgetti, in a conversation with journalists on 22 December, had already announced that the European Commission would ask for an additional investigation: 'They have made us understand that we are going to the so-called 'phase two',' he said. So we will need another few months of investigation, after having done exactly everything that was prescribed by the European Commission itself. The fact that more time is being lost is not a good thing'. Phase two' is scheduled to take between a further 90 working days and up to 110 days at the request of the parties. So it will end in late spring. In the meantime, Lufthansa's pressure on the European Commission has continued, offering maximum cooperation with the aim of obtaining a decision 'as soon as possible'.

Re-reading the document of the DG Competition of the EU, it emerges that the activities of Deutsche Lufthansa and Ita Airways "mainly overlap for the provision of passenger air transport services", but "due to Ita's limited presence outside Italy, the proposed transaction only gives rise to a limited number of direct/short-haul overlaps on routes from Rome and Milan to cities in Germany, Belgium and Switzerland". In the target slots and routes served by the two companies and the network at Linate airport. The same document also mentions 'direct/indirect overlaps on medium and long haul routes from Italy and Switzerland to America, Africa and Asia'.

Ita Airways, which has a fleet of 83 aircraft, aims to reach 96 at the end of 2024: at the moment, an agreement has been reached to obtain the Sace guarantee, and a further financing operation with financial institutions for the purchase of new owned aircraft is being finalised. Ita Airways expects to close December 2023 with cash of about 450 million. Two factors concur in the direction of a quick decision: first of all, the disbursement of the EUR 325 million for the capital increase is on standby until the European Commission's authorisation. Then it must be considered that the commercial and operational synergies between Ita Airways and Lufthansa's network remain frozen until Brussels' pronouncement.