EU gives green light for Lufthansa's acquisition of Ita, causing criticism from Condor airline
EU Approval of Lufthansa's Acquisition of ITA Airways Meets Resistance
Two rival aviation companies, Luxair and Condor, have filed lawsuits against the European Commission's approval of Lufthansa's acquisition of a significant stake in ITA Airways. Luxair, the national airline of Luxembourg, and Condor, a German leisure airline, argue that the remedies imposed to safeguard competition were inadequate.
Condor has taken legal action in the European General Court, contesting the European Commission's approval of Lufthansa's acquisition of a 41% stake in ITA Airways. The German airline claims that the measures enforced to offset the potential harm to competition are inadequate, as they fail to provide a level playing field for independent carriers in the European aviation market.
Luxair, on the other hand, has targeted the slot allocation aspect of the merger clearance. The Commission's decision allowed Lufthansa to acquire the stake on condition of a remedies package, which included the redistribution of airport slots at Milan Linate Airport. However, Luxair asserts that all the slots released by Lufthansa and ITA Airways were awarded to a single airline, easyJet, thereby excluding smaller regional airlines from competing fairly.
The legal battles take aim at ensuring a fair level of competition in the European aviation market, rather than opposing the merger outright. Lufthansa initially acquired a 41 percent stake in ITA Airways in January 2021, securing further takeover steps agreed upon. The EU Commission approved the phased takeover of Alitalia's successor by the Lufthansa group in July 2022, subject to certain conditions.
Sources: ntv.de, dpa
In the wider context, both lawsuits underscore the importance of maintaining a balance in competition, particularly for smaller airlines that operate in overlapping markets with the merged Lufthansa-ITA entity. The outcomes will likely shape future mergers and acquisitions in the European aviation industry.
The lawsuits filed by Luxair and Condor, notably against the European Commission's approval of Lufthansa's acquisition of ITA Airways, focus on the adequacy of remedies imposed to maintain competition in the European aviation industry, which primarily involves employment policy, business, and finance. Moreover, the legal actions call attention to the necessity of creating a level playing field, ensuring smaller airlines can compete fairly amidst larger entities such as the Lufthansa-ITA group, thus impacting industry regulations and future merger and acquisition policies.
