Yet another update, yet another "remedy" within the dossier that is being put together to achieve the merger between Lufthansa e Italy Airways. Late last night, Corriere della Sera reports today, the Italian Ministry of Economy and the German carrier sent Brussels a further contribution to the package of "remedies" requested Antitrust EU to give the green light to the union. On the one hand an outstretched hand on Milan Linate, on the other "resistance" on flights to North America.
Antitrust doubts: monopoly and tariff increases
Last week Antitrust Commissioner Margrethe Vestager had deemed it insufficient the remedies prepared by the two companies up to that point and moved the deadline for the decision to July 4th. Last night's agreement is indicated as the last attempt to convince the Directorate-General for Competition to approve the agreement signed a year ago, but which has so far failed to dispel doubts that the merger will not only end up worsening the service offered , but also leads to a 10% increase in fares and creates an almost monopolistic situation at Linate.
More space for competitors at the Forlanini in Linate
As regards the Milanese city airport of Linate, Mef and Lufthansa would improved their offering initial, two European sources familiar with the discussions explain to the Courier: the parties they would give up to at least 19 daily pairs of slots (equal to 38 return flights), more than the 11-12 proposed, but less than those requested by the EU antitrust (30). According to the Italians and Germans, the package of take-off and landing rights would be enough to introduce competition on "attentive" international routes and others allow to rival carriers, Easyjet, Volotea and possibly a third, to position 5 aircraft at the Forlanini in Linate. The gap on slots between the Mef-Lufthansa offer and the EU request, the sources underline, could be filled in the next few days and is considered the least problematic aspect to resolve.
But they don't give in on Italy-North America
It's on flights Italy-North America that the parties keep the point, also because it is the segment where the carriers make profits. As far as we know, United Airlines is not willing to change the joint venture agreements with Lufthansa and Air Canada. Mef and Germans undertake to keep ITA's activities on the North Atlantic separate from those in Frankfurt for two years. But at the end of the two-year period it would still be up to the EU to authorize the demolition of the "wall" between activities. Brussels then wants the Germans to renounce the jv's revenues from Italy-USA flights or the part of Ita's turnover on the same segment. Exclusion from the jv, experts say, would slow down the strengthening of ITA. Between tomorrow and the day after tomorrow, say community sources, a meeting is scheduled in Brussels between Vestager and Lufthansa leaders to obtain a historic green light for the Germans and crucial for the future of the Italians.
