Lufthansa likely to win EU approval for ITA deal, sources say

By Foo Yun Chee

BRUSSELS (Reuters) -Lufthansa is likely to secure EU antitrust approval for its bid to buy a stake in state-owned Italian airline ITA, with regulators leaning towards clearing the deal, three people with direct knowledge of the matter said on Thursday.

The European Commission, which acts as the EU competition enforcer, has however yet to make a final decision, they said.

German carrier Lufthansa is seeking to buy 41% of Alitalia successor ITA, thereby boosting its market presence in the lucrative Italian and southern Mediterranean market.

EU approval for the deal would be a big win for Italy which injected millions of euros into loss-making Alitalia over the years.

The Commission, which has set a July 4 deadline for its decision, Lufthansa and the Italian treasury declined to comment.

Lufthansa is still tweaking remedies to allay any remaining concerns the EU antitrust watchdog may have, said one of the sources.

To address EU competition concerns, Lufthansa has said it will not integrate ITA into its joint venture with United Airlines and Air Canada for two years.

Lufthansa has also offered to keep some competing ITA short-haul routes to Germany, Belgium, Switzerland and Austria and cede 40 slots at Milan Linate airport to easyJet and Volotea.

(Reporting by Foo Yun Chee, additional reporting by Klaus Lauer in Frankfurt and Giuseppi Fonte in Rome; editing by David Goodman, Kirsten Donovan)