Lufthansa's ITA Airways deal may reduce competition, EU regulators warn

EU antitrust regulators on Tuesday opened an in-depth investigation into Lufthansa's bid for a minority stake in Italian state-owned ITA Airways, saying the deal may reduce competition in flights to and from Italy.

Lufthansa wants to acquire a 41% stake in ITA for 325 million euros ($353.2 million) as part of a capital increase.
 

The European Commission said the deal may reduce competition in the market for passenger air transport services on several short-haul and long-haul routes.
 

The EU competition enforcer said affected short-haul routes would be those connecting Italy with countries in Central Europe while long-haul routes between Italy and the United States, Canada, Japan and India could be impacted due to close competition between ITA, Lufthansa or Lufthansa's joint venture partners.
 

It warned the deal could create or strengthen ITA's dominant position at the airport Milan Linate.
 

The Commission said remedies offered by Lufthansa were insufficient in scope and effectiveness to address competition concerns, confirming a Reuters story.
 

The EU watchdog set a June 6 deadline for its decision.