[cwoodward]

The European Commission has effectively warned off Lufthansa and ITA against lodging a formal application of intention for Lufthansa to buy a substantial stake in Italy’s ITA Airways, telling both the German flag carrier and the Italian Economy Ministry that any proposed deal will likely be rejected due to substantial competition issues.

Lufthansa’s plan to acquire a 41% stake in state-owned ITA for €325 million would risk distorting competition on certain routes for passenger air transport services to and from Italy
The EC also cited that “if the deal were allowed to proceed it would also raise competition concerns on a number of long-haul routes between Italy and the US, Canada and Japan, where competition does not appear to be sufficient” .

The EU executive added “any ITA-Lufthansa deal could also “create or strengthen ITA’s dominant position at the Milan-Linate airport” This could make it more difficult for competitors to provide passenger air transport services to and from the city’s airport”.

[transtraxman]

So in whose pocket does ITA end up? Consolidation will continue ahead in Europe but only among the Europeans. That means that ITA will go to IAG or AF/KLM if it cannot go to Lufthansa. The only other outside candidate is Turkish Airlines for which ITA would be a good capture.
That makes one wonder what will happen to Air Europa and SAS. These two are destined for IAG and AF/KLM respectively. So what happens next? It seems that the pot has been knocked over. What does Lufthansa have on its list as next in line? Will it go after a low cost carrier like Easyjet or Norwegian? A lot is lying on the next move.

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cwoodward

[AndrewinHK]

In many ways, I agree with the EC on this one. However, I think often competition authorities fail to take into account the potential insolvency risks to a business should an acquirer not be found, and the detrimental effects that would have on competition. ITA is unlikely to survive without a suitor, the criteria the EC listed seem to preclude IAG and AF/KLM, and I am not sure Turkish would be politically palatable for the Italians.

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persiantraveller

[cwoodward]

Andrew , I suggest that it is not the EC’s remit to take potential insolvency risks to a business into account -and in my view properly so.
ITA was/is, I have always believed was an ‘iffi proposition with little chance of a long term future – it has never been a robust business nor likely to ever be so without a major investor taking control.

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MarkCymru

[MarkCymru]

The threat of insolvency is what allowed BA to swallow BCal, DanAir, Air Europe, BMI, etc…. If those carriers had been allowed to go bankrupt, there might be real competition for a company which has built its business model on appropriating most of the available slots at Heathrow and many of those at Gatwick. IAG is now seeking to extend its business model to Spain. Lufthansa has been able to do even better: it got a dominant numbers of slots at Frankfurt and Munich without even needing to buy anything

Slots are a public good and much of the underlying cost of the air infrastructure has been met by taxpayers. All slots at congested airports should be put up for regular, open, competitive auction with most of the proceeds going to the state. Then these concerns over abuse of monopolies would largely disappear

[cwoodward]

@MarkC I agree with your first para – but totally disagree with your second unless by regular you are thinking perhaps every ten/fifteen years otherwise it would spell chaos for both LHR and its customer airlines.

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MarkCymru

[MarkCymru]

Yes @cwoodward, I think the auction should be for a fairly long-term lease. Do you remember how ITV franchises used to be managed in the UK? I think it was every seven years they were put out for re-tender

[persiantraveller]

Lufthansa has already way too much on its plate. ITA would have been good with LHG but as an Italian citizen, I would hope that it goes with AF-KL, maybe the Brits/Spaniards with IAG but we don’t really like that here – hah, just kidding. Regarding Turkish, they will never acquire AZ or any other European airline (AFKL, SAS, AirEuropa, etc…), as there is too much cultural difference and business philosophy, also, TK seems to be doing well on its own already, so nope. Turkey isn’t even in Europe, it’s more MidEast. The last thing we need is LH to take another low-cost carrier (since it already has Eurowings), raise prices, and reduce competition. Consolidation is good but within certain limits. Maybe LOT, TAP, and a Balkan airline could form a 4th group, who knows? Anyway, going back to AZ, I hope and believe that they can have a good and stable future and be a profitable and leading carrier in Europe, with the right leadership and no mismanagement from nepotism-ridden politicians wanting to do their own interests. Italy has the best of everything, why not a good airline to serve and export the best of our country?! We can surely do it.

[cwoodward]

Jut a point re Turkey’s geographic position.
It is most certainly not in the ‘middle east’
Almost all of the country lies in Asia and the much smaller area that is not in Asia lays squarely in Europe.

I absolutely agree that the population of Italy deserves a decent robust airline however and unfortunately successive, inept dithering governments over this many years have I believe almost destroyed that possibility at least in the short to mid term.

In over 60 years of operation Alitalia continually lost money owing to problems linked to government and political interference and corruption of one sort or another. (which continues)
It only ever reported only one year of profit (1998) since its foundation in 1946 until it demise.

Good to see you here.

[persiantraveller]

Hey there @cwoodward, Turkey is culturally very close to the Middle East, which is just an area and isn’t even a continent per-se. The only part that’s in “Europe” is the European side of Istanbul and beyond that until the border. Technically, if you want to be nitpicky, that’s the Balkans. For me, ‘Asia’ starts from Central Asia and the Caucasus and goes until the Far East. And the Middle East is included in Asia but it’s a different region, just like the Indian subcontinent. Anyway, my point was that TK isn’t a usual European carrier, it’s more MidEast oriented and so is its market and target.

Regarding AZ, yes, I agree with you, and it’s embarrassing that they have basically only turned a profit in 1998. I knew that, and it’s honestly really sad.

[cwoodward]

persistanttraveller My point was re the Geography nothing more – not your personal view of it – no knit picking.

BTW What is the Balkans is usually defined as comprising Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Montenegro, North Macedonia, Romania, Serbia, and Slovenia and all or part of each of those countries located within the peninsula. Portions of Greece and rarely a small potion of Turkey is sometimes included. By almost all definitions Turkey is not regarded as a Balkans country.

I and I suspect many would disagree with your view that TK can defined as a middle eastern orientated carrier ether geographically or culturally. The service style is defiantly rather more European than that of the ‘sandpit airlines’ and has latterly become more so according to reports. The cabins, service style treatment of and by the cabin crew could fairly be defined as international I believe. Have you ever travelled with them may I ask ?

[persiantraveller]

@cwoodward – I’m sorry but all it takes is a google search. Turkey is recognised as a (partially) Balkan country (as is Greece). Also, haven’t you heard of the Ottoman Empire and their influence on the Arab and Persian world… doesn’t sound European to me. This trend of adding countries like Georgia, Turkey, and Azerbaijan to “Europe” needs to stop.

You’re not only wrong about the geography, but about the airline too, in my opinion.

Turkish Airlines is not a European carrier, their market and traffic is mostly connections from Europe to Asia and their megahub in IST is similar to that of the ME3 (if you are familiar: banked hub model), I don’t believe many actual European (Italy, France, Germany, Spain, UK, Switzerland, etc…) passengers flying to America will choose to go out, all the way to Istanbul adding at least 4 hours to their travel plans and then back the other way to the US, while maybe they will gladly choose another actually European carrier and stopover in a nearby city (eg. a German has to go to Lima and he will most probably fly direct or IB there (to make a Euro carrier example, obviously to LIM you might fly LATAM as well), but not TK).

Regarding service, that is not a real indicator of the airline’s culture, and I would still have to say on that front that they are still not a Euro airline. They are very ME3 style, with complimentary hot meals being provided on flights to Europe and a real business class cabin with recliner seats and IFE on most narrow-body aircraft. AFAIK, no other real European airline has an actual J cabin on their short haul aircraft but rather a pathetic blocked middle seat (*cough* AF, AZ, LH, BA, IB). Their cabins and service style resemble the ‘sandpit’ ME3 (maybe a bit uglier) with of course a few differences but not at all like the Euro airlines. The only big difference is the crew and treatment and the fact that they are all local with little to no expats/migrants and they’re less courteous and more westernised/treated in the European way on TK, but . Also, what do you even mean by “international” style? They are a downgraded ME3 mixed with some European flair. And yes, I have flown TK on numerous occasions (both domestic in Turkey and international from Europe to MidEast).

Many agree with my view and I suspect many would actually disagree with yours. Now with that said, may I ask if have you ever travelled with them?

[Rferguson2]

Once Turkish have a more consistent onboard experience on their long haul aircraft they will definitely be a force to be reckoned with.

However, the hard product on their 777’s and A330’s is very poor. I wouldn’t even say ‘previous’ generation more like previous to previous generation. And similar to Qatar (although thankfully less often now) TK often play ‘aircraft lottery’ where that flight operated by a 787 with all aisle access is miraculously switched to a 777 with a 2x3x2 configuration as happened to me when travelling IST-EWR.

TK does have a great product on its narrowbodies but it’s also worth mentioning that they fly these birds on some of the longest 737 sectors in the world (eg IST-DAR at 7hr40min).

[cwoodward]

Your information is incorrect Turkey is NOT regarded as a Balkans country. Quote…..”is usually defined as comprising Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Montenegro, North Macedonia, Romania, Serbia, and Slovenia and all or part of each of those countries located within the peninsula. Portions of Greece and rarely a small potion of Turkey is sometimes included. By almost all definitions Turkey is not regarded as a Balkans country”.

My post contained the correct definition of what is regarded as being the Balkans which does NOT normally include Turkey and you oft repeating the same incorrect information it does not make make it correct.

Istanbul is in Europe as is its airport which is regarded as the 5th busiest in EUROPE
Turkish airlines regards it self as a European airline in both domicile and service style. It most certainly is not a a middle eastern airline. They are a Star Alliance member and are said to be the 5th European member to join. Their own website proclaims them as being “The Best Airline in Europe.

The facts speak for themselves.

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tomwjsimpson

[Rferguson2]

I guess the semantics of what continent or region Turkey belongs to geographically is one aspect and culturally or religiously another. However I guess it is most often famed as the ‘country that straddles two continents’ although I am sure they have border communities that associate with all different kinds of regions.

I understand the comparison of TK more to the ME3 than european airlines however as they are doing the same as the ME3 – leveraging their unique geographical position where they can connect most of the world via their hub with one stop.

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persiantraveller

[Author]

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