Lufthansa Offers New Anti-Trust Deal with Austrian Airlines

Lufthansa has now submitted a brand new proposal to European Union regulators in a bid to allay competition concerns surrounding its proposed takeover of Australian Airlines. The European Union had previously rejected several proposals over fears that Lufthansa would have a monopoly on routes between Vienna and other European cities.

This new offer follows a meeting that took place between the European Union’s competition commissioner, Neelie Kroes, and the Lufthansa chief executive, Wolfgang Mayrhuber. The European Union said, after receiving the new proposal, that they would now market test it.

The commission is still a little scared that Lufthansa would or could gain a dominant position on routes into Austria from Germany and Switzerland. This is because Lufthansa already owns Swiss International Airlines as well.

The timing of this new proposal being approved is becoming increasingly important. A July 31 deadline for the European Union’s approval is one of the conditions of Lufthansa’s earlier offer to Austrian’s shareholders.

The approval has been bogged down for several weeks now over a number of routes, which Lufthansa should give up in Vienna. However, Lufthansa is insisting it could not relinquish the amount of routes that the European Union wants and still makes the deal economical.

A lot of people that are close to the talks said that Lufthansa has managed to secure additional cost savings from Austrian’s unions, making further concessions to Brussels financially viable for the first time. Of course, Lufthansa’s main European rival, Air France, has been against the deal from the start. They are against the state aid of €500 million, which halves the Austrian debt right away.