Exclusive-EasyJet talking to European Commission about taking over slots at Linate airport, CEO says

By Joanna Plucinska and Foo Yun Chee

BRUSSELS (Reuters) -EasyJet is in talks with the European Commission about taking over slots at Milan's Linate airport that could be available as a result of Lufthansa teaming up with ITA Airways, the budget airline's chief executive said on Wednesday.

The German carrier is seeking a 41% stake in the state-owned Italian rival for 325 million euros ($351.4 million) as part of a capital increase and expects a statement of objections from the Commission setting out concerns this month.

Europe's competition enforcer warned earlier this year that the concessions initially offered by Lufthansa, which had said it was prepared to offer targeted remedies, were insufficient in scope and effectiveness to address competition concerns.

"I've made no secret of the fact that we would love to increase our presence at Linate," EasyJet's Chief Executive Johan Lundgren told Reuters on the sidelines of a conference in Brussels.

"And we think that would make absolute sense, so that is something that we are discussing with the Commission."

Lufthansa is also in talks with EasyJet on remedies, a person with direct knowledge of the matter told Reuters.

ITA Airways, the European Commission and Lufthansa declined to comment.

The Commission had said affected short-haul routes would be those connecting Italy with countries in Central Europe while long-haul routes between Italy and the United States, Canada, Japan and India could also be affected.

Ryanair's Chief Executive Michael O'Leary, who has expressed an interest in the slots that free up in the Lufthansa-ITA deal, said slot surrenders were essential to competition.

"We have to encourage consolidation, but in a way that protects competition. And the simplest way to do that is to have really meaningful slot surrenders, so that you encourage competitors to grow at those big hub airports," he told Reuters in an interview.

The Commission opened a full-scale investigation into the Lufthansa-ITA deal in January on concerns that the acquisition could reduce competition in passenger air transport services on several short-haul and long-haul routes.

(Additional reporting by Ilona Wissenbach and Angelo Amante; Editing by Kirsten Donovan and Emelia Sithole-Matarise)