The aviation industry in Europe is undergoing a transformation, and the latest decision by the EU Commission represents a significant turning point: Lufthansa has received final approval to enter into ITA Airways. With the approval, granted on Friday, November 29, 2024, the German aviation group has free rein to acquire a strategic stake in the Italian airline. The move is part of a comprehensive realignment and consolidation of the European aviation market, which is characterized by economic challenges and changing passenger needs.
Lufthansa had already applied to join ITA Airways in July 2024, but the approval by the EU Commission was subject to conditions. To ensure that Lufthansa's market position did not increase too much as a result of this takeover, the group had to prove that there were so-called "remedy takers" - competitors who would take over slots at Milan-Linate and Rome-Fiumicino airports and thus maintain fair competition. This requirement is intended to prevent Lufthansa from gaining a dominant market position through the takeover of ITA Airways and restricting competition on certain European and international routes.
On November 29, 2024, the EU Commission finally approved a remedy package that allows Lufthansa to acquire a 41 percent stake in ITA Airways. In the coming years, Lufthansa plans to increase its stake to full control in several steps. This step will strengthen Lufthansa's competitive position in European aviation and significantly expand its presence in the southern European market.
The role of competitors and the reaction of the industry
New regulations have been implemented to protect competition. Easyjet, one of Lufthansa's main competitors in European short-haul flights, will be involved: from spring 2025, the British airline will station five aircraft at Milan-Linate and three at Rome-Fiumicino. This strategy will enable Easyjet to use the slots freed up by the transaction and consolidate its position in Italy.
In addition, the cooperation between Lufthansa and ITA Airways will enable competitors IAG (International Airlines Group) and the airline alliance Air France-KLM to use the slots in Rome for feeder flights. These new connections are intended to ensure that passengers can also change flights to North America - including Washington DC, Chicago, San Francisco and Toronto - in an acceptable time. This is intended to prevent Lufthansa from having excessive market power on certain routes.
Strategic importance for Lufthansa
The acquisition of ITA Airways is a strategic step for Lufthansa that will have far-reaching consequences. The Italian airline not only offers Lufthansa expanded routes and access to new market segments, but also the opportunity to expand its position as a leading European aviation group. The integration of ITA Airways will enable Lufthansa to complement its hubs in Frankfurt and Munich with additional connections and thus strengthen connections to important international destinations.
With this measure, Lufthansa is pursuing a long-term growth strategy aimed at securing and expanding its market position. This strategy is particularly important as European airlines are increasingly facing competition from low-cost carriers and changing passenger needs.
Looking to the Future: Impact on the Aviation Market
The approval by the EU Commission could have far-reaching consequences for the aviation industry. The measures to maintain competition, such as giving slots to competitors, show that regulators in Europe are committed to maintaining a fair market. Nevertheless, it remains to be seen how these regulations will affect the market in the long term. The challenges in the industry, such as high operating costs and the need for digitalization, are also factors that will influence the development of market conditions.
Competition in the European market is likely to become more intense following the acquisition of ITA Airways. Passengers can expect a wider choice of connections and potentially better connectivity in Europe and North America, which could lead to increased demand and possibly also an improvement in service quality.
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