ITA and Lufthansa Affair in Troubled Waters

The ITA – Lufthansa operation is becoming more complicated considering statements by the EU Competition Commissioner, Didier Reynders, who intends to introduce stricter rules for granting acquisitions in air transport.

In particular, the transfer of slots to other carriers would no longer be sufficient to avoid dominant positions compared to the necessity for competitors to transfer ancillary services and even contracts with suppliers for any collateral activities, without also monitoring the fleets of partners to contest any transfers or use of aircraft. 

To date, however, Lufthansa has not yet forwarded the notification of the agreement which is needed to obtain the EU’s definitive ruling on the entire operation. 

According to rumors, they are still in the pre-notification phase, which in fact extends the time by at least 60 days for the definitive take-off of the partnership. 

To all this, there are legal disputes of 1,200 former Alitalia employees, which have already resulted in sentences that are not entirely favorable to the former national Italian airline. The issuing of rulings in favor of some workers, with the obligation of re-hiring by ITA, led the Italian government to pass a decree – of dubious constitutionality – which precludes the thesis that the transfer of Alitalia’s activities to ITA can be considered a branch of the company.

 A “move” to avoid a possible obligation for ITA to reabsorb excess resources, with a consequent economic commitment of tens of millions which Lufthansa has already made it known that it does not intend to cover, also overshadows the possibility of withdrawing from the agreement. 

For several weeks the leaders of the German carrier have reiterated that the first step of the agreement involves the acquisition of 41% of ITA shares, with a capital increase of 325 million euros without further steps. 

SOURCE: ITA and Lufthansa Affair in Troubled Waters