The European Commission has approved Lufthansa’s acquisition of a stake in ITA Airways, conditional on remedies. Lufthansa will take joint control of ITA with the Italian Ministry of Economy and Finance.

The approval follows an in-depth investigation in which the Commission collected wide-ranging information and feedback from stakeholders, as a result of which it raised concerns about (i) reduced competition on certain short-haul routes, (ii) reduced competition on certain long-haul routes, and (iii) creating or strengthening a dominant position for ITA at Milan Linate airport.

Lufthansa and the Italian Ministry of Economy and Finance (MEF) proposed several remedies. These included commitments for the specified short-haul and long-haul routes, so that rivals can more easily operate on them. In addition, Lufthansa and MEF made commitments to transfer slots at Milan Linate airport to takers of the short-haul routes, enabling them to set up a sustainable base at the airport and potentially offer a one-stop connection between Italy and Central Europe. The Commission will first need to approve any remedy takers for the commitments.

The Commission was satisfied that the commitments fully address their competition concerns and approved the transaction.

A team of Frontier economists led by Julia Dietrich, Mette Alfter and Stefan Lochner advised Lufthansa on the acquisition.

Read more in the Commission’s press release here.