German Cartel Office Clears Lufthansa 10% Air Baltic Stake

Germany's Federal Cartel Office has approved Lufthansa's acquisition of a 10% minority stake in Latvian airline Air Baltic, despite acknowledging significant competition concerns on several routes between Germany and the Baltic states. The regulator justified the approval by noting that the affected routes represent small markets with very low revenue, limiting the overall impact on competition and consumer choice. Lufthansa's investment, valued at approximately €14 million, grants it a supervisory board seat and competitive influence, though Air Baltic will remain an independent company. Air Baltic's chairman indicated the transaction is proceeding smoothly, with completion expected within a couple of months, and did not rule out the possibility of Lufthansa increasing its stake in the future. The deal reflects a broader regulatory approach in Europe to minor shareholdings that do not substantially alter market dominance amid increasing airline consolidation. The German watchdog also noted that European competition law would only apply if Lufthansa gained control of Air Baltic, which is currently not the case.