Italian Deputy Prime Minister and transport minister Matteo Salvini is not amused with European Commissioner Margrethe Vestager’s objections to German airline Lufthansa’s entry into Italy, calling it “Euro-madness”.
A proposed acquisition of ITA Airways (ITA) by Deutsche Lufthansa and the Italian Ministry of Economy and Finance is being investigated by the European Commission.
The EC is worried that the agreement may cut competition on some routes, which could result in increased costs or a poorer service for travellers.
The regulatory body is urging both ITA and Lufthansa to scale back their operations on certain routes, thus allowing space for competing carriers.
Proponents of the merger have until April 26 to address the EC’s list of objections.
With a planned €325 million purchase, Lufthansa aims to acquire 41 per cent of the Italian state-owned ITA. That comes as IAG, the owner of British Airways, is attempting to acquire Air Europa in Spain.
“A risk of a competition issue is of course that prices go up and services go down,” Vestager said on March 26. “That is what we mean when we say risk to competition: that users will have to pay.
“The potential concerns do not affect the vast majority of routes that ITA operates,” the EU anti-trust regulator added.
Lufthansa said it would present “remedies” to the EC on time and that the deal would strengthen competition in Europe and Italy.
Salvini was less diplomatic. He described the European Commission’s objections to the acquisition of ITA from Lufthansa as “yet another [form of] Euro-madness”.
“After many years were wasted, the Government wants to secure the jobs of thousands of workers, ensure Italian people’s right to fly and the arrival of tourists in Italy, and Brussels objects to it,” he said.
“In my opinion, it is because there are economic interests behind it.”
Italian media outlets noted that the entry of Air France-KLM into Swedish SAS airline, with a 20 per cent stake, saw minimal opposition in Brussels.
Similarly, Korean Air faced few obstacles in acquiring Asiana, despite its quasi-monopoly in Europe.
Italian newspaper Corriere della Sera was able to secure the list regarding the merger from EU sources, it said, which covers 39 routes in four blocks.
The initial block encompasses 12 direct short-haul routes linking Italy with Central Europe, specifically targeting markets served by the Lufthansa group in Germany, Switzerland, Austria and Belgium.
The second focuses on 14 short-haul routes with direct or indirect overlaps, where ITA and Lufthansa compete closely.
The third grouping includes eight long-haul routes where at least one of the parties operates a direct connection.
Lastly, the fourth block involves five long-haul routes between Italy and North America, where neither party currently offers a direct connection.
