Germany's Condor Airlines is legally challenging the European Commission's decision to approve Lufthansa Group's takeover of Italy's ITA Airways. According to Condor, the move aims to protect fair competition in European aviation.
Lufthansa IATA/ICAO Code LH/DLH Airline Type Full Service Carrier Hub(s) Frankfurt Airport, Munich Airport Year Founded 1953
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This development comes more than four months after ITA Airways officially became part of the Lufthansa Group. Notably, Condor is not alone in its opposition. Luxair, Luxembourg's flag carrier, has also filed a legal challenge against certain decisions made by the EU regarding the Lufthansa and ITA merger.
Harming The Competition
In a LinkedIn post, Condor Airlines CEO Peter Gerber announced the company's decision to oppose the merger between ITA Airways and Lufthansa, citing concerns over unfair competition in European airspace. Condor Airlines has filed a legal challenge with the General Court of the European Union against the European Commission's approval of the deal.
Condor said the European Commission's review missed important parts of the market by looking at only a few overlapping routes. The airline warned that this limited view ignores how Lufthansa and ITA could end up being the only travel choice for many Italian passengers, especially on long-distance flights, reducing competition. As a result, Condor asked the EU General Court to annul the decision. Gerber wrote:
"After many years of consolidation, the European aviation industry is highly concentrated. The six largest airlines alone control almost three-quarters of the seat capacity offered by all European airlines. We are now at a pivotal moment, and it needs decisive action to secure fair competition in the interests of consumers."
Following Suit
Condor is not the only airline legally challenging certain decisions made by the EU regarding the Lufthansa and ITA merger. Luxembourg's flag carrier, Luxair, has also filed a lawsuit before the General Court of the European Union against the European Commission. In a statement, Luxair said that it has no objection to the merger itself and that the legal action is not directed at Lufthansa or ITA Airways.
Luxair is challenging a specific aspect of the European Commission's approval process. Typically, the Commission identifies competition concerns when reviewing mergers and may approve them if the companies propose solutions to address these issues. In the Lufthansa/ITA case, the Commission found concerns on certain short-haul routes and at Milan Linate Airport (LIN), according to Luxair.
The merger was approved after Lufthansa and ITA offered remedies to resolve these problems. However, Luxair objects to the decision to allocate all the available slots at Milan Linate Airport to just one airline, the one tasked with addressing the short-haul route issues. In the statement, Luxair argues that "there is no justification for linking these problems and granting all benefits exclusively to one airline, effectively excluding smaller regional airlines such as Luxair from fair competition."
Related Done Deal: ITA Airways Officially Joins Lufthansa Group As 41% Stake Acquisition Completed
ITA Airways is now officially part of the Lufthansa Group of airlines.
Posts 16 Lufthansa's Aggressive Consolidation
Airline consolidation has been increasing in recent years, as European airline groups seek to acquire smaller competitors to improve connectivity, strengthen finances, and gain other strategic advantages. However, Lufthansa's consolidation has sparked debate, with some analysts questioning whether the group is becoming too dominant by owning too many airlines.
Currently, the Lufthansa Group owns several airlines, including its namesake Lufthansa, Swiss, Austrian, Brussels Airlines, and Eurowings. It also holds a 41% stake in ITA Airways. Additionally, Lufthansa has acquired a 10% stake in Riga-based Latvian flag carrier airBaltic, giving the group both a minority share and a seat on the company's Supervisory Board.
It is worth noting that other European airline groups have been consolidating their businesses and looking to acquire new airlines. For example, Air France-KLM has recently announced its plan to acquire a stake in TAP Air Portugal. This comes amid reports that several European airlines are interested in TAP Air Portugal's acquisition. The sale of TAP has been on the table for a while now, with the relatively new center-right government in Portugal preparing to privatize the airline.