Lufthansa is facing a tough time as its shares drop by nearly 4.5% to 6 euros in early trading in Frankfurt, hitting the lowest point since October 2022. The German national airline is unlikely to offer new concessions to gain approval from European regulators for a 41% stake in ITA Airways. According to ‘Reuters’ sources, there have been no major changes after Lufthansa promised not to integrate the Italian airline into its joint venture with United Airlines and Air Canada for two years.
Previously, Lufthansa had also proposed to keep some competing short-haul routes from ITA to Germany, Belgium, Switzerland, and Austria, and to transfer 40 slots at Milan Linate airport to easyJet and Volotea. The EU’s concerns focus on the impact of the agreement on both short-haul and long-haul flights, as well as on ITA’s dominance at Milan-Linate airport. The European Commission, acting as the competition watchdog, is expected to decide whether to approve or block the deal by the end of the month.
The future of the partnership between Lufthansa and ITA remains uncertain as regulatory hurdles continue to pose challenges. Investors are closely watching the developments as the outcome of the deal could have significant implications for both airlines and the aviation industry as a whole. Stay tuned for more updates on this evolving situation.