The European Commission on Friday approved Lufthansa's takeover of Austrian Airlines after the German carrier agreed to allow competitors to operate between Vienna and Frankfurt, Munich, Stuttgart, Cologne and Brussels, according to dpa. The deal aims to create Europe's biggest airline group in terms of passenger numbers. European Union regulators had already given a provisional green- light to the deal in July, but only on condition that Lufthansa take steps to minimize competition concerns raised by the potential merger. An investigation by the EU executive in Brussels had shown that the merger would have reduced consumers' choice and would have likely led to higher prices on the following routes: Vienna-Frankfurt, Vienna-Munich, Vienna-Stuttgart, Vienna-Cologne and Vienna-Brussels. "Lufthansa submitted commitments which have removed these competition concerns on all these routes," the commission said in a statement Friday. A commission spokesman later explained that Lufthansa had agreed to offer "good quality slots to existing competitors or new entrants on the market." Lufthansa is taking over the Austrian state's 42-per-cent stake in the national carrier as well as privately-held shares for a maximum total of 382 million euros (545 million dollars), depending on Austrian Airline's future business performance. In a related decision, the commission also cleared the Austrian government's offer to take over 500 million euros of Austrian Airline's debt, which totalled nearly 2 billion euros at the end of March, after concluding that the move was compatible with the European Union's rules on state aid. "This case shows that consolidation in the airline sector is possible with proper remedies to safeguard consumers' interests," EU Competition Commissioner Neelie Kroes said. In a statement issued by its corporate headquarters in Cologne, Lufthansa said the conditions that had been imposed on the deal by the commission were "economically acceptable." Shares in the German carrier jumped 1.1 per cent to 11.26 euros on the Frankfurt stock exchange on the news. Lufthansa is the largest German airline with hubs at at the Frankfurt and Munich airports. Lufthansa also controls Swiss, Air Dolomiti, Eurowings and Germanwings and has recently acquired British Midland and SN Brussels Airlines. In 2008, Austrian Airlines and the Lufthansa group transported a combined 81.3 million passengers. The French-Dutch carrier Air France KLM counted 75.4 million passengers in the same period. Top managers from Lufthansa and Austrian planned to hold a press conference outlining details of the deal on September 3 in Vienna.
