Green light for LufthansaAustrian merger

LUFTHANSA has got the go ahead to merge with Austrian Airlines. The European Commission’s (EC) gave its approval on the condition that Lufthansa and Austrian give up some of their flights on the routes between Vienna and Frankfurt, Munich, Stuttgart, Cologne and Brussels for competition reasons.

An EC spokesperson said: “Lufthansa has committed itself to take steps to deal with our reservations about less competition on those routes.”

EU Competition Commissioner Nellie Kroes said: “Consolidation of the civil-aviation industry will not occur if reasonable precautions for the protection of user interests are taken.”

Lufthansa said the EU’s green light of approval paves the way for it to integrate Austrian into the Lufthansa group next month, ending months of negotiations with the EU Commission and adding to its trophy case of acquisitions.

For its part Austrian Airlines welcomed the news while announcing it would slash management numbers by nearly half as part of ongoing restructuring plans.

“Lufthansa is a big chance for us, it’ll give us enormous thrust but we can’t just lie back. It’s up to us to turn this thrust into speed and altitude. We’ve got to do our homework,” said Austrian’s co-chairmen Andreas Bierwirth and Peter Malanik in a statement.

Prior to the EU approval, Lufthansa had offered to give up 19 take-off and landing slots in Vienna to encourage greater competition to ensure EU commission’s vital backing.

The reduction in capacity will be accompanied by a cap on post-takeover growth for AUA.

“This case shows that consolidation in the airline sector is possible with proper remedies to safeguard consumers’ interests,” EU Competition Commissioner Neelie Kroes said.

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