Lufthansa Cleared To Takeover ITA Airways: How The Deal Was Allowed By Regulators
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- Опубліковано 26 лип 2024
- The European Commission (which we’ll refer to as the EC) has finally approved Germany's Lufthansa's purchase of 41% of Italian national airline ITA Airways, which was previously Alitalia.
The latest announcement follows months of consideration by the EC’s competition authority and concessions by the Lufthansa Group.
Well, in today’s video, we’ll examine this major European deal, what Lufthansa had to give up in order to attain regulatory clearance, and the ‘swift integration’ planned by Lufthansa Group.
Article: simpleflying.com/europe-appro...
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Air France Ate SAS, now Lufthansa ate ITA in return Lol
in defense, even if ITA is not part of skyteam, lufthansa will still eat ITA anyway
yeah, i thought Lufty was already big enough.
@@avgjoeavglifebiggest airline outside of the US
I would argue the order of operations to be the other way around, but the EU spent a lot more time considering the ITA merger than the SAS purchase.
@@marcusmyge because the EC make a big deal out of it due to Lufty’s size. AFKL Group only have AF, KLM, and LCC transavia compared to Lufty’s 4 full-service carriers (Lufty, Swiss, Brussels and Austrian), LCC Eurowings, a wtf (Air Dolomiti) and 3 leisure airlines (Edelweiss, Lufthansa City and Discover Airlines) among other airline subsidiaries. And don’t forget IAG, for they have LCC Vueling, LEVEL the leisure airline, and 3 full-service carriers with bunch of subsidiaries.
LH groupe now flys every plane type from Boeing and Airbus under the Sky
They don't fly the 737...the max is ordered thought. The 737 that fly Eurowings routes sometimes belong to Smartwings.
@@JackJohnson-cm6jk they have 40 max9 on order, should arrive soon
@@Sanginius23 yeah end 2027 ...wonder if they will go to Eurowings again or somewhere else.
@@JackJohnson-cm6jk SunExpress has only 737s and is owned by the Lufthansa Group.
Is there an airline that operates the b757/b767?
ITA have got one of the nicest liveries out of all the airlines.
ITA's livery is the most beautiful out there. LH had to buy it as the pressure to consolidate in Europe is intense. There will only be 4-5 big ones left. ITA/Alitalia was almost never profitable, that's the downside, but LH got noriously unprofitable companies like Swiss, Austrian or Eurowings profitable, so maybe they can do it once more.
Tbh ITA airways on its own has been on the route to being profitable in 2024 anyway. They had their first full business year in 2022, and a loss of 480m€ in a start up year while also dealing with the late effects of the pandemic isn't that bad.
In 2023 their losses were just 5m€
As a scandinavian person i was more shocked that SAS did not get picked up by Lufthansa groupe they where/are in the same alliance but weirdly now scandinavian is gonna be in airfrance-klm groupe and skyteam
Carsten Spohr is a confessing Italy-Fan - this was very much his Deal and you can hear it when you read his Statement. On the opposite: The new SAS CEO started his career at KLM, so no wonder what Airline he preferred as partner for SAS.
Don’t forget that thanks for LH, SAS was not part of the LH-AC-UA interline agreement for North American flights.
I think AF-KL will be much better owner of SK than LH Group.
ITA airways to the Star Alliance in the future? 👀
in the near one, yes
2026 not sooner
yes
lack of competition always lead to higher prices :(
ULCCs in Europe are ini price war with each other, no need to worry.
I respectfully disagree, the fact that there will now be 2 major chunks of airlines competing over every route from and to europe means that prices are likely to go slightly down in general. However, some specific routes that are only properly served by one of these alliances will be exploited by the lufthansa and air france groups
Good luck to Lufthansa to make ITA profitable!
Economies of scale will play a big role in it.
it’s a big bet
I think LH is seeing plenty of US travel to Europe (in particular Italy) and prices out of the US are quite high and therefore lucrative. Additionally ITA has an extremely young fleet which might help to reduce cost short and midterm.
Indeed. But on the other side: ITA isn´t Alitalia and Lufthansa can be lucky therefore.
@@NicolaW72Alitalia huge debit is in the hands of Italian taxpayers indeed😢
as someone who flies to Italy a lot for work, and with no Star Alliance in the UK but with status I really like this. It gives me more options for long haul and I can start now earning when I travel for work!
I hope they leave the ita livery as is. I like the blue.
ITA has a lot of potential, I like their brand identity and their cabins look stylish in all classes. I’m a Star Alliance guy, so I’m excited to have the flag carrier of Italy become a potential option for me. I hope the might of Lufthansa group will prove ITA with the investment it needs to thrive.
Nice aircraft on the outside, but the inside… here at sfo they can def compete with United if they try for the Italian market.
Well the market in Italy is more competitive than the german one, low cost airlines fly from major airports like FCO and MXP, good luck to Lufthansa competing in Italy.
ITA airways will never be competitive domestically or to holiday destinations in Central Europe anyways, but it is highly profitable on business travel and transatlantic
Lufthansa is my preferred airline. I never had any issues when I’m flying with them.
If this really goes through, it'll be some of the best news for frequent flyers from the small and (as far as airline economics go) irrelevant country: Slovenia.
Why? Our country is poorly connected so Slovenes rely a lot on flying from various airports in the neighboring countries of Austria, Croatia and...
...Italy!
Slovenian airports are served by Lufthansa and Swiss, both part of the LH group and Star Alliance membes. Croatia airlines in Croatia and Austrian in Austria (from where we fly a lot) are also Star Alliance members. Because of this (and also because the ex flag carrier of Slovenia was in Star Alliance), many Slovenes are enrolled in the LH's Miles&More frequent flyer programme.
In the recent years, Slovenes also started traveling a lot from Italy (mainly from Trieste and Venice) - but ITA is (currently) SkyTeam. If ITA really gets into Star Alliance and adopts the Miles&More programme (status maching from the Volare for ITA's exsting frequent flyers), we'll be in a fantastic position for being loyal to Star Alliance.
That is indeed the most important development in the European Aviation Market at the moment. I was really astonished that it was not more recognized outside of Europe. Lufthansa can indeed be happy with this decision by the EU Cmmission because their Conditions can be fulfilled without risking the economic advantage. The single but important Uncertainty factor will be the Italian Politics because the Italian Governments holds at least at the moment still 59% of the shares.
I hope this means that ITA will start flying again to Hungary. The route was discontinued when Alitalia went bankrupt and never came back. Every Lufthansa hub is connected to Hungary: Munich, Frankfurt, Zurich, Vienna, Brussels plus a bunch of Eurowings hubs in Germany. I would be nice to be able to have access to another longhaul hub.
The combined ITA/LH fleet will become more Airbus focussed, as ITA only operates Airbus. Overall good news for the EUropean aviation industry.
As long as the merger doesn't mean a significant reduction of flights or increase of prices, it's a win all situation,
Still in a long term it could mean less competive prices.
It is a minority share but huge 41% of it's shares.
It was about time!
It is interesting that the European Commission imposes such conditions, but turns a blind eye to the Lufthansa Group's de facto monopoly on traffic between Germany, Austria, Belgium and Switzerland, which leads to completely overpriced fares there.
Yes and No.
The European Commission cannot hinder LH to make a lot of money on routes they deem very profitable. And the EC can also not dictate ticket prices on routes on which LH has a de-facto monopoly.
What the European Commission CAN DO (and what they ACTUALLY DO!) is define the amount of slots on a given route which see monopolies, ie Munich-Hamburg, that can be allocated to any airline.
In other words: If Ryanair decided to start a Munich-Hamburg tomorrow, they could immediately do that because LH are not allowed to soak up all the slots. However, if other airlines are not willing to build an infrastracture to make these routes profitable, it certainly isn't LH's fault.
And THIS is the point where the EC did something they have not yet done before and making an example out of the ITA buy: They are actively forcing LH to make sure there is competition on TransAt flights to/from Italy. LH has to ask their competitors to activate a route and even propose incentives to make it work. That's a very strong demand by the EC, so even more interesting that despite this issue, LH still sees a large potential (€€€) in buying ITA.
A lot of legal issues later
I would've loved to see ITA still at SkyTeam, but who am I to argue their choices!
This will mean ITA airlines will change their alliance from Skyteam to Star Alliance this will create a large footprint for Star Alliance and will squeeze out One world & Skyteam.
Well in return SAS will move from star alliance to skyteam
Looking forward for them to join the star alliance
So they allow this but not IAG and aireuropa??
I think Lufthansa will benefit the most from employees. There will be employees to work. People in Germany don’t want to work for airlines business anymore 🙈
LH group has one more! Discover and Eurowings are two different airlines now
Germans managing Italians, that's going to go well.
It was bound to happen since the Alitalia days. Now it has. Too bad ITA wasn't still known as Alitalia. Also joining the STAR alliance. Wow.
when will lufthansa group become their own airline alliance?
This means that there should not be any reasons why not the AF-KL Group could not take over the TAP as the next step after announced that SK will be part of the AF-KL family.
After that they could take over BT too as they already have codeshare agreement.
Air ticket can see?
Lufthansa Group/Lufthansa Shareholding Full Airline List:
Lufthansa 🇩🇪
Lufthansa City 🇩🇪
Lufthansa CityLine 🇩🇪
Lufthansa Cargo 🇩🇪
SWISS International Airlines 🇨🇭
ITA Airways 🇮🇹
Air Dolomiti 🇮🇹
Edelweiss 🇨🇭
Eurowings 🇩🇪
Eurowings Europe 🇩🇪
Discover Airlines 🇩🇪
Austrian Airlines 🇦🇹
Brussles Airlines 🇧🇪
Sun Express 🇹🇷
AeroLogic 🇩🇪
@@idxluaviation you forgot Air Dolomiti 🇮🇹
@@montramito2 Funny i wrote that one down but forgot to put it in... added it lol.
SunExpress and AeroLogic are Joint Ventures with Turkish and DHL respectively, so I wouldn't count them in.
However, you forgot Eurowings Europe. That's a different entity from Eurowings ;)
Thank you very much - yes, indeed! But as mentioned here: Sun Express is a Joint Venture with Turkish Airlines and AeroLogic a Joint Venture with DHL, at both Airlines Lufthansa has "only" a share of 50% and an equal, strong Partner - and at ITA for now "only" 41%, while the other Airlines are 100% Lufthansa. This is a difference.
lufthansa cityline will be shut down soon
I don´t understand how the European Comission allows this (clearly LH Group will turn into a monopoly within central Europe) and on the contrary, keeps blocking Iberia´s takeover bid for Air Europa for over 5 years...
I’m still confused because ITA is SkyTeam and Lufty is Star Alliance. How would they have a partnership this way?
Obviously, you did not make it to the end of the video...
ITA is to leave SkyTeam and join Star Alliance.
What I cannot understand about this buy is the argument by LH (which I read somewhere else) that Rome FCO is a good hub for connections to Africa.
Yes that may be so, but wasn't Brussels Airlines supposed to be the Africa-North America transitional hub in the LH network? There are ongoing talks with AC and UA to feed more flights into Brussels BRU to make an Africa hub work. Which makes sense because historically Belgium has a strong connection to Sub-Saharan Africa and anybody who's ever been to Belgium can confirm that.
So honestly, I'm confused.
But Alitalia had a strong connection to Africa too in its hay day. ITA could serve more Anglophone countries while Brussels could service Francophone countries in Africa. Two airline groups serving the continent is better for Lufthansa than one. Transit wise, Rome has better overall facilities. I know a lot of Africans from the US hate transiting in Brussels due to the airport infrastructure. Their only other viable option is Royal Air Moroc or the longer way Ethiopian Airlines to East Africa and then back. ITA is also an overall better experience in Business class for status customers.
I’ll still never set foot on them again. LH used to be a superb airline. No longer. Cabin staff are rude, and the aircraft I’ve flown on recently were filthy.
Cabin staff from Lufthansa, Swiss, Austrian, Air Dolomiti etc. was always nice to me. But they managed to destroy my luggage several times. Or deliver it to my address a few days in delay because it didn't arrive at all.
Crazy. Flying will get more and more expensive
seems like LOT becomes the one and only large independent airline in Europe.. hmmh
Depending on how you define a "large airline"; Ryanair, Wizzair and Easyjet will likely stay independent. And these together already own half of the market.
@@semaex correct, I mean a regular carrier
LOT is a grade choice if gone fly International.
Can you make one video aboth Tarom buy by emirates or Qatar airwats
I think the A330neo will unfortunately leave the ITA ):
Oligopolies have been dominating most markets in any industries lately, so why not?
It looks like it's a form of solidarity amongst European partners to improve their economic infrastructure.
As long as they maintain the minimum three factors that matter the most to passengers: low airfare, short waiting time and fairness in customer service assistance.
It would be interesting to see whether greater discounts automatically get applied from using mobile apps through out the whole flying process, until the passenget gets to his seat.
With AI now being sprinkled everywhere, I hope they maximize the NFC tap for anything, I'm sure the algorithms will help the airlines be more efficient,
and since most travelers are trying to eliminate checking luggage as much as possible, there's a saving in time and money from lost and found.
My point is that the reward should come from the passenger responsibly being totally autonomous in his journey without having to make the trip itself an eventful journey.
Great video, insightful.
A little naive
Fortunately, TAP will likely go to SkyTeam if Delta or AF-KLM buys them.
Rumours IAG / oneworld want to buy TAP too.
Unstoppable? They're the worst in terms of timeliness. How can they be thinking of expanding when they can't run their operations as they are now? Boggles the mind...
The Lufthansa monopoly has to stop
I hope we will not lose the beautiful blue colour of ITA planes?
@@hassocks1206 no it wont
IAG v Lufthansa. Now theres an article or video comparison.
Skyteam is no match for Star Alliance
Not a single merger is good for consumers.
It is, when the alternatives are an end of service due to bankruptcy, or a company that needs constant subsidy to survive (which would be fine in the medical sector, but not for an airline).
National airlines are also bad for customers
If a market is already concentrated a lot, yes. But many small (national) airlines just doing their own thing isn't good either, as service suffers a lot.
I'm sure SWISSAIR costumers disagree. Not sure they were happy when from one day to another that airline went bancrupt without any sort of financial backup.
Yes mergers tend to dominate and raise prices. Thats why an effective anti-monopoly commision watches over them in developed countries.
But the upside of a consolidated market which doesnt undercut costs, something which ultimately leads to bancruptcies (leaving both staff and pax stranded), is a far more important factor.
YESSSS 🗿🔝🛩️✈️🫡
This sucks for Sky team
@@killerbees177 they already ate SAS
Oneworld just chillinf
@@GG-hi5if and Iberia won against BA this past sunday. Young sibling won over old one.
@@AndrewIndoChannel what does football mean to airlines
Oh no, i hope it wont ruin the service on ITA.
of course it will. They ruined swiss. That crappy company will ruin everything they touch.
I expected a no.
Magrethe Vestager said no last time so...
The biggest thing I took away from this video is how dangerous the ideology of competitiveness is for Europe. Avoiding massively monopolies is very important, without a doubt, but this level of control is detrimental to the overall growth of a country. I'm glad they didn't stop it but these kinds of deals are only possible because the EU is such a large area- just like how socialism was only possible in the USSR because of its size. Preventing companies from getting larger reduces their economies of scale for greater efficiency and greater revenue to increase wages/salaries for all individuals (while most usually go to the corporate leadership) I'm now understanding a bit more as to why purchasing power can be relatively higher compared to similar earning countries but why absolute growth is hampered in the European Union. Hopefully the EU eventually realises the areas it overregulates and can reform.
I don’t like star alliance 🤦♂️ I love SkyTeam with Delta
Lufthansa has so past its sell by date.
Let ITA go bankrupt they Lufthansa can buy it dirt cheap
these are terrible news for the consumers
Sad! One of the least competent full-service airlines in the world!
LH seems to like buying money loosing airlines.
well those are the ones normaly being sold
I will still avoid them Lufthansa used to be one of my favorite, but they nickel and dime you on everything. I’ll stick to United Delta or BA and inside Ryanair or vuleling for flights to or in Italy as you know what you are getting.
Why do airlines have such a love affair with Alitalia and now ITA. It hasn’t worked out in the past, but I wish LH all the best.
And yeah, I’ll be watching this one as close as I did the Etihad/Alitalia debacle 😂
Airlines has a love affair with the Italian market. It's one of the biggest tourist destinations in the world. Also because of the geography of Italy there are a lot of internal flights. Being in a dominant position in such a market would be really beneficial.
ITA AIRWAYS shouldn't joint it it can be independent
@@Worldwide_aviation81 they tried when they’re still Alitalia. Look where it got them.
So basically france, germany, and spain now own almost all major airlines in europe ? only ireland remains with ryanair?
Aer Lingus is also owned by IAG (Spain + England). I would not be surprised if Ryanair or Wizz Air has bigger share of the Italian market than ITA.
Germans and Italians coming to together… history repeating itself yet again… uh-oh
LH should have rather bought SAS
LOL. The Germans buying the Italians. The gall! The bitter swallow! What’s next, Mercedes buying Ferrari?
Audi already owned Lamborghini for a while now so.. Nothing new
Italians are good at pizza and spaghetti but when it comes to systems design and engineering..., I'd rather have a German.
State Aided airline buying another State Aided airline, so much for an un-interfered competitive internal market
State aided? because LH got help during covid which all has been paid back alread?
ITA are garbage. This is a major upgrade
Such acquisition would presumably lead to the decadence of ITA service as Lufthansa group flights often feature rotten food and a bit filthy cabin. Anyway, this expansion will purportedly abate the financial constraint of ITA airways. And contingencies have to be fulfilled in order for the merger to be finalized.
by the way, why does Italy operate airbus only? Why not 50/50 Boeing too? We yanks spent blood and treasure rescuing Italy from itself and their Nazi partners. Maybe they could say thank you to us as we stormed their beaches, rescued their priceless artifacts, liberated their towns and gave them back their beautiful country…then we left…unlike the Soviets. Italy is free, because America made it so. Return the favor and buy 50 percent Boeing….hey, they’re better planes anyway. 🇺🇸🇺🇸
Dream on ...
No ITA is an Airbus loyalist they will never ever order a Boeing piece of crab
Obvious troll but I will bite. By that logic the US airlines should all buy Airbus as theyre only independent because of France, Spain, the Netherlands, Prussia (Germany) etc who financed ,trained, supplied and fought alongside the U.S continental army to get Americas freedom.
Also nice way to forget about all the other countries that fought in Italy....Britian, Brazil, Poland, India etc etc etc. Why not buy say Brazilian from Embraer by your logic.
@@danielforrester5265 troll LOL. I said 50/50 for a reason. It’s reasonable. All Airbus is not.
Oh my gawd. Move on from the war, honey. It was 80 years ago. So you didn't "liberate" Italy out of the kindness of you heart? The US made sure everything went its way thereafter with a war-devastated Europe the anni di piombo, Operation Gladio, leaving Spain under Franco. Like it or not, the Soviets did most of the legwork in the Second World War anyway. If it hadn't been for the Eastern Front, the Western Allies (not only the US, sweetheart, but the UK, Canada, exiled forces, etc.) would have been hard pressed to keep Nazi Germany across the English Channel.