The European Commission has given the green light, subject to conditions, to the operation that will gradually bring ITA under the control of Lufthansa. The EU executive announced this in a note without details. Contrary to what usually happens in similar cases, the Q&A (questions and answers) are not available. The solutions offered, confirms the EU executive, concern, first of all, short-haul routes from Rome and Milan and “some airports in Central Europe”: as expected, Lufthansa and MEF will make available the assets necessary to start direct connections on these routes for two competing airlines.
To address the Commission’s competition concerns, Lufthansa and the MEF presented a package of solutions, including.
COMMITMENTS FOR SHORT-HAUL ROUTES – Lufthansa and the MEF will make available to one or two competing airlines the resources necessary to start operating direct flights between Rome or Milan and certain airports in Central Europe. The beneficiaries of the remedial measures will have to operate on these routes for a certain minimum period of time. Lufthansa and the MEF will also ensure that one of these competing airlines has access to ITA’s national network to offer indirect connections between certain airports in Central Europe and certain Italian cities, with the exception of Rome and Milan.
COMMITMENTS FOR LONG-HAUL ROUTES – The merged company will enter into agreements with competitors to improve its competitiveness on the affected long-haul routes, for example through interline agreements or slot exchanges. This will lead to an increase in the frequency of direct flights and/or better connections for flights with stopovers on each route. In its assessment, the Commission took into account the fact that MEF will retain a controlling stake in ITA after the transaction and will continue to be incentivised to ensure that ITA competes with Lufthansa’s joint venture partners in North America, at least until ITA is integrated into the joint venture.
COMMITMENTS FOR MILAN LINATE AIRPORT Lufthansa and MEF will transfer take-off and landing slots at Linate Airport to beneficiaries of remedial measures for short-haul routes. The number of slots to be divested exceeds that needed to operate short-haul routes, as well as the number of slots that the transaction would have added to ITA’s portfolio. This will enable the beneficiary of the solutions to create a sustainable base at Linate Airport and potentially offer its own stopover connections between Italy and Central Europe.
“Today we have reached a positive conclusion on a historic and long-standing case, that of Alitalia and then Ita, which has also been a subject of public debate for 40 years. This conclusion is a success for this government, which has resolved the problem, but also for the entire country,” said Economy Minister Giancarlo Giorgetti at a press conference.
Source: IL Tempo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
