German airline Lufthansa has been granted permission by the European Commission to acquire a significant stake in Italy’s ITA Airways. However, in exchange, Lufthansa must create room for competition on flight routes between Italy and Central Europe.

Lufthansa announced its investment in ITA in spring 2023, initially paying €325 million for a 41% stake in the company. Lufthansa has also expressed intentions to fully acquire ITA after 2025, subject to discussed takeover conditions that would allow them to expand their share in ITA at that time.

The Italians have been facing financial difficulties for some time and could benefit greatly from this investment. In March, the European Commission initially withheld approval for the deal, expressing concerns that Lufthansa could become too dominant with a large stake in ITA Airways, potentially limiting passenger choice on certain routes and at airports.

To secure approval for the acquisition, Lufthansa has agreed to open up more space for other airlines on routes between Italy and Central Europe. This move aims to encourage other airlines to offer flights on these routes, providing consumers with more options beyond just Lufthansa or ITA.

Additionally, Lufthansa will be relinquishing some of its landing and take-off slots at Milan Linate Airport as part of the conditions set by the European Commission.