Though it’s true that the transaction hasn’t officially closed just yet — and may not until the new year — the acquisition by Lufthansa of 41 percent of ITA is all but done now that the European Commission has given its final sign-off. It wasn’t certain this would actually get done, and not just because ITA is the worst airline ever.
See, Lufthansa Group decided to try to haggle at the last minute and knock the price down, something that the Italians did not appreciate. I’m sure they all sat down and discussed it in a calm and rational manner… but it did eventually get settled. And with that settled, it was just a matter of the European Commission agreeing with the remedies that Lufthansa proposed to make them comfortable that this wasn’t too anti-competitive. The EC has now accepted the plan, and it approved distribution of slots to Air France-KLM, IAG, and easyJet.
These divestitures will have an impact on the makeup of flying in the country, but it won’t be all that significant. Here’s how it looked this summer.
Domestic and International Scheduled Seat Share Departing Italy – July 2024
Data via Cirium
Ryanair remains the largest airline in the country while easyJet will now put a little more distance between itself and Wizz for third. But ITA and the Lufthansa Group joint venture will now make up 21 percent of the total market. Still, the EC was very concerned about anti-competitive behavior and wanted concessions in Rome and Milan specifically.
On short-haul flights, Lufthansa had to make enough slots available to “start non-stop flights between Rome or Milan and certain airports in Central Europe.” The EC also required Lufthansa to give access to ITA’s domestic network via interline to connect to these Central European cities from around Italy. On top of this, Lufthansa had to transfer slots at Milan’s close-in Linate — which is hugely important, as we all remember….
EasyJet is getting those Linate slots, so let’s take a look at easyJet’s Rome and Milan networks thanks to Cirium data.
So far, easyJet has a very minor presence at Rome/Fiumicino and Milan/Linate with flights primarily to major business centers. The map below is from July 2024:
Maps generated by the Great Circle Mapper – copyright © Karl L. Swartz., Data via Cirium
But that small presence is because those airports are somewhat constrained, especially Linate. Just take a look at Malpensa where it’s easy to get in, and you’ll see where easyJet excels within Continental Europe plus the British Isles.
Maps generated by the Great Circle Mapper – copyright © Karl L. Swartz., Data via Cirium
At Linate, ITA and its new overlords had nearly 70 percent of departures this past July. The next largest was Aeroitalia with 6.5 percent. ITA’s new friends at easyJet came in third with 5.9 percent. I haven’t seen exact slots numbers for this, but I believe it’ll allow around 15 departures. That would effectively triple the airline’s size at Linate.
But these remedies aren’t just about short-haul flying. They’re about ITA’s general share in long-haul as well. Specifically, Lufthansa has to “enter into agreements with rivals to improve their competitiveness on the long-haul routes of concern between Italy and North America, for instance through interlining agreements or slot swaps.”
Interlining is, well, it’s fine. That is a thing already, and Lufthansa will have to continue it. But slots are a bigger deal. The numbers I’ve seen — which I have not confirmed — are 5 daily departures for British Airways’s parent IAG and 2 daily departures for Air France-KLM.
What will they do with these? Neither of these airline groups have subsidiaries that consider Italy a home market, especially for long-haul, so it will be an uphill battle. Remember when Air France tried to fly from the US to London? Yeah, that didn’t go well.
I figure IAG may try to have LEVEL run these flights. It would make sense from a configuration perspective where there’s a ton of demand but probably not much on the premium side that IAG can tap into. But for Air France-KLM, I honestly have no idea. It’s entirely possible that they just ask Delta where they want the airplanes to go, and they’ll point ’em there. I don’t know if they could just have Delta fly the airplanes themselves or not, but that would be the best option.
Now, we just wait and watch this unfold. Over the next year, Lufthansa Group will see what it has gotten itself into. It plans on integrating it into the group’s framework and the joint ventures pretty quickly, it says. Then it’ll have to think about that option that’s out there to buy the remaining 59 percent of ITA. I wish them luck… a lot of it.
3 comments on “Lufthansa and ITA Finally Come Together”
How would the long-haul slot remedy work? Does FCO have differentiated slots for short- vs long-haul? Or would ITA simply have to relinquish appropriately timed slots that are most suitable for long-haul (morning arrival and late morning/early afternoon departure)?
We may not actually see an increase in the number of long haul flights, but rather changes to slot timings.
For example, Delta may shift up it’s JFK-MXP flight to arrive one or two hours earlier, which is much better for business travelers.
That very much improves competitiveness.
As intercountry high-speed trains become more numerous, the need for short hall flying within & between adjacent countries will shrink drastically. For example… Germany & the Netherlands, but you can pick any two adjoining countries with high-speed train networks to see how this will effect the aviation system.