Lufthansa wants to strengthen its position in the rapidly growing European aviation market, but has also assured the EU that the acquisition will not have adverse effects on fair competition on long-haul routes.
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Lufthansa recently revealed that he is very close to getting approval of the European Union (EU) for your acquisition of the Italian national airline ITA Airwayspending the approval of the EU competition authority.
Lufthansa shares were down 5.57% on Thursday evening, trading at 5.93 euros. The operationwhich for the moment could be around 325 million euroswill allow Italy to get rid of ITA Airways, a deficit asset for some time, which will greatly contribute to cleaning up national finances. The deal must close before July 4but details may change by then.
Lufthansa is likely to execute the acquisition in various stagesthe first of which will be the acquisition of a stake of approximately 41% of ITA Airways, which will be worth around 325 million euros. However, later on, Lufthansa will also have the option to get another 49% from ITA Airways, if you wish. He last 10% could also be on the table in the futurealthough the value of these additional holdings has not yet been revealed.
On May 25 this year, when Lufthansa agreed to take over 41% of ITA Airways, Carsten Spohr, CEO of Deutsche Lufthansa AG, stated in a press release: “Today’s agreement will mark a beneficial situation for Italy, ITA Airways and Lufthansa Group”.
“And it is a good news for the Italian consumers and to Europe, because a stronger ITA will invigorate competition in the Italian market. As a young company with a modern fleet, and with its efficient and expanding hub in Rome, ITA fits perfectly into the Lufthansa Group,” the statement continued.
“As part of the Lufthansa Group family, ITA can become a sustainable and profitable airlinethat connects Italy with Europe and the world. At the same time, this investment will allow us to continue our growth in one of our most important markets,” he adds.
Why does Lufthansa want to acquire ITA Airways?
Although currently considered a loss-making asset, the acquisition of ITA Airways could give Lufthansa a enviably strong position in the European market of aviation, as well as a stronger control of the transatlantic market.
Lufthansa already has a solid track record of capacity for Refloat companies and subsidiaries in difficulty. In this case, ITA Airways will join other Lufthansa-owned airlines such as Swiss International Airlines (SWISS), Austrian Airlines, Brussels Airlines and many more. Similarly, Italy is a booming market for air travel, with high demand for EasyJet, Ryanair and other low-cost airlines. Lufthansa also directs much air traffic to its subsidiary airlines via its key cities of Munich and Frankfurt.
Due to Lufthansa’s extensive position on the continent, the agreement with ITA Airways has sparked a great scrutiny by EU authoritieswhich have had to reiterate that they would continue to compete fairly on their long-distance routes and would not excessively raise prices for travelers.
