The European Commission (Commission) announced that it had initiated a Phase II, in-depth, investigation of Lufthansa's proposed acquisition of Austrian Airlines on 1 July 2009. The Commission raised concerns over the possibility of higher fares and a reduction in choice of airline services for passengers on routes from Vienna to: Frankfurt, Munich, Zurich, Stuttgart, Cologne, Geneva and Brussels. In mid-July, the Commission rejected Lufthansa’s suggested commitments on the basis that they were insufficient to allay all of the competition concerns identified, and described the proposals as ‘worse’ than the remedies proposed during the phase I investigation. Although the Commission still has several months to assess the deal, there was pressure on Lufthansa to resolve the issue by the end of July to meet their commercial timetable. On 31 July 2009, the Commission announced it had received an improved proposal and the Commissioner had provisionally agreed to accept the conditions subject to the views of the Advisory Committee which is made up of representatives of the national competition authorities. The new deal will ensure that slots are opened up to new entrants, and Lufthansa would agree to enter into interlining agreements and code sharing arrangements upon request.
At the same time but under a separate investigation, the Commission is looking into state support which is currently being given to Austrian Airlines.
Other recent Lufthansa mergers
Lufthansa obtained the Commission's approval for its acquisition of British Midland in May 2009, and for SN Belgian Airlines in June 2009.