Summary
- The European Commission’s objections to the ITA-Lufthansa merger give attention to 39 routes, causing potential market dominance.
- Intercontinental routes like Rome to Latest York are a key concern for the competition authority.
- Italy expresses frustration as Brussels’ opposition to the merger threatens the event of a competitive national airline.
Details have emerged regarding the specifics of the European Commission’s objections to the ITA-Lufthansa merger. As seen by Italian media Corriere della Sera, the complete and unredacted document lays out the routes the European Commission’s antitrust authority deems problematic.
In November of last 12 months, Lufthansa informed the European Commission of its intention to buy 41% of the revived Italian national airline, eventually taking complete control at a later stage. As reported by Easy Flying, the European Commission opened a so-called investigation into the acquisition in January, giving it – at the least officially -until June 6 to supply a final decision.
The routes affected
The document, which the Italian news site received from sources, provides the precise details for the routes that pose competition-related issues. The acquisition of ITA by Lufthansa would make the 2 firms a single entity. On a few of their current routes, the airlines compete. Once merged, operating as a single entity, they might dominate the markets concerned. The European Commission’s antitrust authority worries that this may cause prices to rise and quality of service to scale back.
There are a complete of 39 routes listed within the document. 12 of those routes originate in either Rome or Milan, going to cities in the remaining of Europe, and 14 originate in smaller, secondary towns in Italy, also going to the remaining of Europe. Eight confer with long-haul intercontinental routes between Italy, the US, Canada, and Japan. Each airlines dominate the market share on those routes, with passengers connecting on either Lufthansa or ITA flights to succeed in their final destinations. There are five other routes mentioned within the document despite the incontrovertible fact that there are not any direct flights between them. Let’s take a look at the detailed list of all the affected routes.
Photo: Davide Calabresi | Shutterstock
An intercontinental nightmare
One in all the more significant problems the European Commission has pertains to the intercontinental routes, particularly affecting services between the US and Italy. The intercontinental routes within the Commission’s Statement of Objections are listed as follows:
- Rome to Latest York
- Rome to Washington
- Rome to San Francisco
- Rome to Chicago
- Rome to Toronto
- Rome to Los Angeles
- Rome to Miami
- Rome to Tokyo
Photo: The Global Guy | Shutterstock
ITA’s long-haul network spans 16 destinations, of which eight are listed above as concerns for Brussels’ competition authority. If the European Commission gets its way, 50% of the ITA long-haul route network can be slashed for the acquisition.
Rome To Tokyo Day by day: ITA Airways Increases Frequency To Meet High Demand
The airline has witnessed impressive load aspects on this route.
The Italian short to medium-haul market is already quite saturated. Europe’s low-cost carriers have grown rapidly in Italy over the previous couple of years, posing a threat to other full-service airlines with generally higher operating costs. By developing on the long-haul side, ITA can attract each connecting passengers and try and mitigate at the least a number of the effects of low-cost airlines.
Potential cuts in Europe
The 12 routes from Milan and Rome are as follows:
- Milan to Brussels
- Milan to Dusseldorf
- Milan to Frankfurt
- Milan to Hamburg
- Milan to Stuttgart
- Milan (Malpensa) to Vienna
- Rome to Brussels
- Rome to Frankfurt
- Rome to Munich
- Rome to Zurich
- Rome to Hamburg
- Rome to Vienna
Note that nearly all of these routes connect Lufthansa Group hubs with Italy. This includes flights to Brussels (Brussels Airlines), Frankfurt and Munich (Lufthansa), Vienna (Austrian Airlines) and Zurich (Swiss International Airlines).
Photo: Robert Buchel | Shutterstock
One other group of 14 routes affect the south of Italy.
- Bari to Frankfurt
- Bari to Hamburg
- Bari to Munich
- Brindisi to Dusseldorf
- Brindisi to Stuttgart
- Cagliari to Munich
- Catania to Frankfurt
- Lamezia Terme to Zurich
- Naples to Dusseldorf
- Naples to Frankfurt
- Naples to Stuttgart
- Palermo to Frankfurt
- Rome to Stuttgart
- Naples to Hamburg
Finally, the European Commission’s underlines five routes on which not one of the two airlines operate, but that may not directly be affected should the merger be approved. This includes:
- Naples to Latest York (only in Winter)
- Milan to San Francisco
- Firenze to Latest York
- Catania to Latest York
- Bologna to Latest York
Frustration in Italy
Inevitably, Italy just isn’t completely happy. The Minister for the Economy, Giancarlo Giorgetti, says that Brussels is attempting to stop Italy from making a world-renowned airline that may compete internationally. Per Il Sole 24 Ore, he said:
“We have now an airline called Ita, previously called Alitalia. We said:
. For ten months we have now been fighting with Europe which doesn’t allow us to do that.”
Lufthansa Reportedly Threatens To Withdraw From ITA Purchase Over EU Concerns
In an announcement to Easy Flying, Lufthansa says it’s nevertheless confident that “the Merger Application might be approved”.
How each airlines will reply to the Statement of Objections stays to be seen. They’ve until April 26 to propose solutions (including concessions) and, if not, try and persuade Brussels that the advantages outweigh the supposed downsides.
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