Lufthansa is set to win European Union approval for its planned stake in Italy’s state-owned ITA Airways, two people told POLITICO.
Barring any last-minute hitches, the European Commission will accept concessions made this week to address concerns over how the deal could affect long-haul flights, especially on routes to North America, the people said; they were granted anonymity to speak freely about a decision that isn’t yet public.
Clearance will diffuse tensions over a deal that risked a veto if the companies hadn’t made extra steps to appease regulators. Matteo Salvini, Italy’s deputy prime minister, had labeled any potential merger ban as a “serious attack on Italy, a hostile act.”
“There was a change of pace, a positive approach on both sides,” one person said. Another said some technical details were still open even as approval was expected. A third source said that talks are more positive, but that there are still outstanding issues.
Italy has lobbied hard for the deal to be cleared, with Italian Prime Minister Giorgia Meloni saying in September that the Commission was blocking the solution her government had put forward. She said the issue was also “brought to the attention” of European Economy Commissioner Paolo Gentiloni, an Italian.
Lufthansa chief Carsten Spohr has been pushing hard to get the deal approved, pointing out that many observers think ITA cannot survive without the deal.
EU competition chief Margrethe Vestager warned the firms in May that officials could not clear the deal “if serious competition issues cannot be solved.”
Lufthansa is Europe’s biggest airline by revenue after buying up three smaller European airlines over the past 20 years. This has left a sour legacy: In the Brussels Airlines takeover, there were no takers for Lufthansa’s offer of airport takeoff and landing slots.
The Commission has since raised the bar on airline deals, warning that ceding slots isn’t an effective way of tackling problems especially now that pandemic-hit airlines are reluctant to enter new routes.
ITA’s owner, the Italian economy ministry, and Lufthansa both declined to comment.
This article has been updated.
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