Lufthansa’s acquisition of Eurowings blocked

Lufthansa‘s acquisition of a 24.9% stake in Eurowings has been blocked by the German federal cartel office, on the grounds that it would exacerbate Lufthansa’s already dominant position in Germany’s domestic market. Lufthansa has competition on only 20 of its 86 domestic routes, and on four of these routes Eurowings is the sole competitor. Moreover, the termination of Eurowings’ codeshare agreements with KLM and Air France reduces foreign carriers’ ability to provide competition. The deal might nevertheless be approved if Lufthansa offers concessions to improve competition, though what these might be was not indicated. Lufthansa acquired 24.9% of Eurowings in January, and had planned to increase this stake further. Joint flight plans were announced in February.

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