Lufthansa Group chief executive Carsten Spohr expects to get an indication this week from the European Commission on its decision regarding the group’s planned move to acquire a stake in ITA Airways.
While a final decision from the European Commission is formally due on 4 July, Spohr suggests the direction of the decision is likely to come ahead of European Parliament elections in Italy on 8 June.
“With the Italian government rightly expecting a fast decision, I would hope to get an indication this week on which direction this will go,” said Spohr, speaking during a press briefing at the IATA AGM in Dubai today. “And since we are in a constructive phase of the dialogue and, I would consider the final phase of constructive dialogue, I think it is realistic to come to a solution this week.”
The group had originally hoped to secure approval for its 41% acquisition of ITA by the end of last year, but the Commission flagged competition concerns over the deal. In March, it outlined some short-haul routes to central Europe, long-haul routes to North America and Japan, and ITA’s strong position at Milan Linate airport as key areas of competition concerns.
Talks have since continued over potential remedies between the Commission, Lufthansa and ITA shareholder, the Italian finance ministry.
“It was more complicated, because it took us longer to come to what I consider our joint target,” says Spohr. ”The joint target from Italy, the European Commission, from Lufthansa is to maintain a European offer [from Italy], for example to North America. If you force ITA to fly against all three American carriers, who are 10 times the size of ITA, and Emirates which is also an operator on the North Atlantic, ITA will have not sustainable future.
”Obviously we don’t always fully agree on the market conditions,” he adds. ”For us as a hub carrier, our definition of the market includes other hubs that connect. I think it’s a different understanding of how the industry works.
”We’ve had complicated but constructive dialogue as how to ensure we have a European offer and maintain choices for customers, which consists of direct routes or flights via other hubs,” he adds. ”We took longer than expected to close in. But I think we are now in the final days, and since we have this joint goal of maintaining a European offer, I am still optimistic… we will find a solution.”
