Ita-Lufthansa: those who push, those who bluff and those who argue against
Here are the latest news and rumors on the Ita-Lufthansa dossier.
Is a sort of deep state between Brussels and Rome working together on the Ita-Lufthansa dossier? This is the impression that some insiders are getting from the latest news and how it is packaged in the newspapers.
The agreement between the Mef and Lufthansa, signed in May last year to guarantee the future of Ita Airways, is risking failing under pressure from the Antitrust. In fact, a small part of the technicians of the Directorate General for Competition, led by Commissioner Margrethe Vestager, would be willing to give the green light to the agreement but only on the condition that Ita never enters the Star Alliance joint venture, which Lufthansa shares with United Airlines and Air Canada.
THE DIVISIONS IN EUROPEAN ANTITRUST
But within the EU Antitrust there are some divisions. If on the one hand there are those who argue that European airlines have acquired too much market power, the other part of the authority, the more objective one, instead wishes to find a solution with the Mef and Lufthansa, as it believes that the real challenge of the future of the skies both with the giants of the American, Turkish, Middle Eastern and Asian skies and favor consolidation.
SHOULD LUFTHANSA ENTER THE CAPITAL OF ITA WITH 41%?
But what do those powers really want to achieve – with connections also in the Italian institutions – who with all their strength are trying to sabotage the wedding between ITA and Lufthansa?
These gentlemen say loud and clear what they want: they want the Germans to propose to the EU a purchase of Ita on their terms, and therefore Lufthansa should propose to the EU to immediately enter the capital of Ita with 41% of the shares through a capital increase reserved by 325 million, as previously agreed. The integration of Ita with Lufthansa, however, would be frozen for 12/18 months during which Ita would continue to be managed by Italian managers and board members, with the president Antonino Turicchi (in the photo) at the head, and without any grafting of people indicated by Lufthansa, and in doing so Ita would remain a subsidiary of the Mef. In fact, the fear that hovers in Italy and that with the arrival of the Germans the first management lines will be made a clean sweep, hence the desire to scuttle the wedding. And this is essentially what the deep state wants to achieve. They are practically telling Lufthansa that to have Ita they have to pay 325 million without being able to count anything!
The Germans, however, do not think at all about such a solution, and the proposal sent to DG Comp instead is to keep ITA's activities on the North Atlantic separate for two years and to divert some of the passengers to the hubs of rival carriers such as Air France, KLM, Iberia and British Airways. Which in itself is a great concession if not a renunciation of a good portion of earnings.
HOW TO UNLOCK THE STALL
The situation that has arisen is also of great concern among the trade unions of Ita Airways. The negotiation, having addressed all the technical aspects, is now in a purely political phase. Some believe that the dossier can only be unblocked with an intervention at a high political level, perhaps with a telephone call between the Italian Prime Minister Giorgia Meloni and the President of the European Commission Ursula von der Leyen, although on May 22, during a visit to Brussels, Carsten Spohr, CEO of Lufthansa, met Commissioner Vestager for the third time in a few weeks.
During the face-to-face meeting, Spohr tried to convince the EU Antitrust by presenting a package of remedies agreed with the Mef. Official statements from the European Commission speak of "few proposals" and "slow progress". Behind the scenes, however, an unprecedented clash is taking place between the Rome-Frankfurt and Brussels duo. Several industry experts are perplexed by the EU Antitrust's approach, considering the requests, especially the long-range ones, unreasonable and counterproductive.
SPAZZALI'S ANALYSIS
“The Ita-Lufthansa dossier has been characterized from the beginning by a lot of interference on the part of a small horde of officials within the offices of DG Comp, who respond to logics other than the industrial ones if they are trying to sabotage the marriage between Ita and Lufthansa” commented to Startmag Cristiano Spazzali, analyst and air transport expert, former general director of AzzurraAir and who has been following the Ita Airways dossier for some time.
According to Spazzali, "including long-range activities in the remedies game was an act contrary to the provisions of European legislation on mergers, and which can only be traced back to a desire to manipulate this dossier to the advantage of a powerful group".
There are those who speak of an Italian deep state that puts a spoke in the wheels: a connection between pro-French Italian managers in Brussels and Italian political and managerial protagonists who secretly sabotage – but by saying the opposite of what they think and for they work on – fusion. In this regard, Spazzali says: "Whether it is called deep state or AirFrance or KLM etc. etc., this is completely irrelevant, what is really relevant is that although there have been many signals in these months of negotiations that foreshadowed this manipulation, none wanted to take the necessary measures to safeguard the wedding."
But how can we get out of this stalemate? “The only solution that I see at the moment – replies Spazzali – is to get the Commission to declare its intentions and if there is confirmation of the will of the DG Comp not to give the green light to the wedding, to refer the matter to arbitration . In this way we will find ourselves before a third arbiter who will have to decide whether the Commission has worked well or there are gray areas on which to shed full light".
In the meantime, Spazzali continues, "there will have been European elections and therefore there will also be a change in the Commission and the climate will certainly be more relaxed".
Finally, Spazzali issues a warning: “For Ita, if there were no green light from the EU it would be a real problem. Ita urgently needs to be supported by an important player and today with the current Prime Ministerial Decree and the restrictions imposed on non-EU foreign investments it would be very complicated to bring in a partner other than Lufthansa. With all these interferences you run the risk of lame the hen before she has even laid the eggs."
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ita-lufthansa-chi-spinge-chi-bluffa-e-chi-rema-contro/ on Tue, 28 May 2024 13:54:23 +0000.