UPDATE 1-Lufthansa and ITA ready to give up Milan slots for merger - sources

(Adds further comments from sources in paragraph 4, background on merger plans from paragraph 6 to 8)

FRANKFUT/ROME/BRUSSELS, Nov 30 (Reuters) - Lufthansa and the Italian state airline ITA Airways could give up take-off and landing slots at Milan-Linate airport to try and win approval for their merger from the European Union's competition authority, three sources told Reuters.

Lufthansa wants to acquire a 41% stake in ITA with a view to taking it over completely. The EU Commision is obliged by the bloc's laws to ensure that mergers do not damage competition to the detriment of consumers.

The EU believes that ITA and Lufthansa together carry too much traffic between Milan and Lufthansa's hubs of Frankfurt, Munich, Zurich and Vienna, according to one person familiar with the matter, who added that this was “where the EU is likeliest to have something to say”.

Restrictions at Rome airport are unlikely as Lufthansa and ITA would not have a dominant market position there, said two of the sources.

The EU Commission and Lufthansa declined to comment. ITA could not immediately be reached for comment.

ITA and Lufthansa have been in contact with EU officials since the summer to try to get the merger over the line, with German Chancellor Olaf Scholz and Italian Prime Minister Giorgia Meloni recently calling for approval from the EU Commission.

Trade unions in Italy and Germany had also appealed to the EU to grant approval soon so that the future of ITA could be secured.

The airlines hope that the discussions will allow the EU Commission to approve the merger in a process lasting not more than 25 days, the three sources said. Any further review would have to last a minimum of 90 days.

(Reporting by Ilona Wissenbach, Angelo Amante, Giuseppe Fonte, Foo Yun Chee; Writing by Louis van Boxel-Woolf; Editing by Sabine Wollrab, Madeline Chambers and Emelia Sithole-Matarise)