(Finance) – The highly anticipated green light for the marriage between ITA Airways and Lufthansa will arrive even earlier than expected. Sources in Brussels have anticipated that the European antitrust headed by Margrethe Vestager will give its approval to the acquisition of the Italian carrier by Lufthansa within days, in any case by the fateful 4th of July which represents the deadline for making a decision. Once the favorable opinion of the European Commission has been received, it will take another two months for the final closing.
EU Commission will say yes to the operation
The European Commission is ready to give the green light to the operation, which will allow the German giant to purchase a 41% share of ITA Airways from the MEF, the small company born from the ashes of the old Alitalia. This will take place through the subscription of a reserved capital increase worth 325 million euros. Lufthansa will then have an option to increase up to 100% of ITA Airways.
The EU’s green light was favored by the “reinforcement” of the guarantees offered by the German company, which gave up several slots and limited operations on a series of long-haul routes, to guarantee the Competition Authority the competitiveness of the air transport market.
Once part of Lufthansa, ITA will be part of a universe made up of over three hundred subsidiaries and affiliates, operating as network carriers, point-to-point carriers and air transport service companies. The airlines already controlled by the Germans include Austrian Airlines, Brussels Airlines, Eurowings, Air Dolomiti and Swiss, in addition to specialized cargo companies and a series of companies operating in the air transport services sector.
The guarantees offered
The guarantees offered by Lufthansa in the latest package of “remedies” presented in Brussels at the beginning of the week, for the acquisition of a minority share of ITA Airways, include the transfer of some slots, especially on Milan and Rome, and the limitation of flights on a series of long-haul routes, which was the issue still to be resolved to obtain the definitive yes from the antitrust authority.
The German carrier, which is part of the Star Alliance alliance of which United and Canada Airlines are also part, had to guarantee competition protection and low prices on long-haul flights connecting Fiumicino to key North American destinations such as Chicago, Washington , San Francisco and Toronto in Canada, and agreed to “freeze” ITA’s entry into the joint venture with the two companies for two years.
The German company then also offered to support the intercontinental flights of rival companies on their hubs: Air France in Paris, the Dutch KLM in Amsterdam, Iberia in Madrid and British Airways in London.
Relaxed financial situation
The financial situation of the Italian national airline, troubled in the past, now appears somewhat relaxed in view of the deal. Prospective liquid assets would amount to 660 million, of which 420 million are current liquid assets and another 240 million deriving from a financing agreement.
The business is also progressing well, in a very favorable phase for air transport, with a turnover that would increase by 30%, according to what was reported by the unions after a meeting with the company.