Lufthansa Group cleared by German regulator to take minority stake in airBaltic

On June 30, 2025, it was announced that the Bundeskartellamt, the German competition authority, had cleared  Deutsche Lufthansa AG (the Lufthansa Group) to acquire a minority stake in Latvian-based carrier airBaltic Corporation AS. The airlines, which have enjoyed a wet-lease partnership for some years, have been moving closer together, and the Lufthansa Group shows no sign of ending its European airline buying spree anytime soon.

The minority stake of 10% comes with additional rights for Lufthansa Group to take part in airBaltic’s decision-making process, said a Bundeskartellamt statement. Moreover, the parties in 2024 agreed on substantially expanding their wet-lease cooperation, where Lufthansa leases aircraft together with their crew from airBaltic. This alignment benefited the proposed purchase of the minority stake, given the two carriers’ close alignment that already exists.  

“The lease payments made [under this agreement] by Lufthansa are of great importance to airBaltic,” added the statement. “Overall, the Bundeskartellamt therefore expects that by acquiring the minority stake, Lufthansa will gain a material competitive influence on airBaltic. In particular, it is to be expected that after the merger, the interests of its minority shareholder Lufthansa will be considered to a significant extent in airBaltic’s decisions.”

JRJfin / ShutterstockHowever, as with other transactions involving Lufthansa, including its 2024 takeover of ITA Airways, the companies will remain separate legal entities. It will therefore remain prohibited for the two airlines to conclude direct anti-competitive agreements and coordinate prices, which the Bundeskartellamt may investigate as cartel agreements.

“The planned acquisition raises significant competition concerns on several flight connections between German airports and the Baltic states,” commented Andreas Mundt, the president of the Bundeskartellamt. ”On some routes, the companies involved are direct competitors, and there are not many alternative carriers. Nevertheless, we had to clear the merger because, on the whole, the routes affected constitute so-called minor markets with very low domestic sales volumes. National merger provisions do not allow the Bundeskartellamt to intervene in minor markets. Therefore, the acquisition ultimately had to be cleared.”

Assessment of impact

The merger control proceedings, which were undertaken to evaluate the initial competitive impact of any equity purchase, first assessed individual flight routes based on the European Commission’s definition in its established merger control practice. The Bundeskartellamt could only examine flight connections affected by the merger project that had a domestic effect. This concerned numerous connections between Germany and the Baltic states.

On a number of these routes, the companies are close competitors, without there being sufficient competition. A merger between Lufthansa and airBaltic could lead to competition problems on these routes, said the Bundeskartellamt. However, German merger control has a minor market threshold, and concentrations cannot be prohibited if the markets affected are of minor economic significance (total domestic sales volume of less than 20 million euros). The Bundeskartellamt found that this threshold was not exceeded on the routes that raised competition concerns. On the other routes, the conditions for prohibiting the merger were not met.

Markus Mainka / ShutterstockAdditionally, the ongoing wet-lease agreement between airBaltic and Lufthansa did not raise any competition concerns, added the regulator. The investigations carried out by the Bundeskartellamt showed that there are many alternative wet-lease providers in addition to airBaltic that Lufthansa could contract with should they choose to. Foreclosure effects are therefore not likely, it concluded.

No Commission involvement

The merger project was subject to German merger control, not European merger control, added the Bundeskartellamt. As an additional condition for it to be subject to notification to the European Commission, Lufthansa would have to acquire significant control of airBaltic, and therefore, a 10% stake does not qualify. In Germany, a merger project can already be subject to notification to the Bundeskartellamt if it involves a non-controlling minority stake.

If Lufthansa increases its shareholding in the future, it might end up acquiring control of airBaltic. In this case, a new merger control proceeding may have to be opened, this time by the European Commission, which would have to undertake a full competition impact assessment as was undertaken when Lufthansa took over ITA Airways.

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