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BRUSSELS (dpa-AFX) - The EU's competition watchdogs have for the time being denied Lufthansa its planned entry into the Italian state-owned airline Ita. A preliminary investigation has shown that the merger could reduce competition on some short and long-haul routes, the EU Commission announced on Tuesday. According to the Commission, it now intends to reach a decision by June 6 at the latest in an extended, open-ended investigation.

The inspectors also want to look at long-haul flights operated by companies with which Lufthansa has joint ventures. These are United Airlines and Air Canada over the North Atlantic. Connections from Italy to India and Japan will also be examined. Lufthansa and Ita are only under limited competitive pressure for European flights from Italy, as low-cost airlines such as Ryanair often operate from more remote airports.

At Milan-Linate airport, Lufthansa and Ita were able to jointly create a dominant position, Brussels officials fear. Lufthansa had already offered to give up some take-off and landing rights there. The Commission described the concessions as "neither comprehensive enough nor sufficiently effective". They had therefore not even been submitted to Lufthansa's competitors for comment.

Lufthansa remains committed to its planned entry into Ita. The MDax group announced on Tuesday that it would continue to press for the swift conclusion of the review and the subsequent implementation of the investment. It continues to assume that the transaction will be approved. According to Lufthansa, Ita Airways should become a complementary and important part of the Lufthansa Group.

The takeover is strategically extremely important for Lufthansa CEO Carsten Spohr. Lufthansa would gradually take over the state carrier of the third largest EU economy, break another airline out of the "Sky Team" alliance dominated by Air France and gain access to a market worth billions.

Spohr likes to describe Ita, which has shrunk from its legendarily loss-making predecessor Alitalia, as a start-up in a medium development phase that could quickly be made profitable. After Austrian, Swiss and Brussels Airlines, Ita would be the fourth state-owned airline from a neighbouring country to end up in the Lufthansa Group in a privatized form.

After months of negotiations, the German MDax group agreed with the Italian state at the end of May 2023 to acquire a minority stake of 41 percent in Ita Airways. In return, Ita is to receive 325 million euros in equity from Lufthansa cash. According to the agreement, Lufthansa can also acquire a further 49 percent of the shares from 2025 under certain conditions and possibly the remaining 10 percent at a later date.

Italia Trasporto Aereo (Ita), founded in 2020, took over the flight operations of its insolvent predecessor Alitalia in October 2021, but is not its legal successor. However, the new airline has secured take-off and landing rights as well as the Alitalia brand. The legendary name could possibly soon be reactivated under the new corporate umbrella./ceb/DP/jha