Lufthansa Group chief executive Carsten Spohr is still targeting completion of a deal to acquire a stake in Italian carrier ITA Airways before year-end.
More than a year since Lufthansa first agreed terms on a deal to acquire a 41% stake in ITA – with an option to ultimately take full control of the airline – European Commission regulators in early July finally gave their conditional approval to the deal after Lufthansa and ITA committed to a number of remedy actions to satisfy the Commission’s competition concerns.
Specifically, the agreed proposed remedies tackle concerns around the competitive impact on some short- and long-haul routes – most notably from Milan Linate – on some Italian routes to central Europe and on transatlantic flights where Lufthansa has a strong presence through its joint venture with Air Canada and United Airlines. The concessions focus on giving up assets, including slots at Linate, to rivals, alongside enabling those rivals to offer competitive onward connections.
“We maintain our optimism that we can close in Q4,” Spohr said during a second quarter earnings call today, when asked about likely timeframes for completing a deal.
He suggests it may take another one or two weeks ”more or less” to agree plans with the potential remedy takers, before it would then put the proposed remedy outcomes to the Commission for approval.
Lufthansa is unable to begin integrating ITA into the group until final approval is given. “Everybody in the process, including the remedy takers, want to be fast,” notes Spohr.
