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Lufthansa bid put in holding pattern

EUROPEAN Union regulators yesterday accused Lufthansa AG of not doing enough to allay anti-trust concerns over its bid for Austrian Airlines and they are now unlikely to approve it by the end of the month.

Lufthansa has the right to pull out of the takeover if EU approval doesn't come through by July 31.

The European Commission said it must examine the deal closely because it thought it could reduce choice and increase fares for passengers on some routes.

EU spokesman Jonathan Todd said Lufthansa had talked to regulators about making changes but these were "worse" than an earlier offer. He did not give details on what Lufthansa had suggested.

Todd said it would be impossible for regulators to approve the deal unless they received "concrete remedy proposals from Lufthansa in the next few hours" that eliminated the EU's competition worries.

The EU must decide on approving or blocking the bid by November 6.

The EU executive said the new company could become too powerful on flights from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels.

Lufthansa is Germany's biggest airline and Austrian Airlines dominates routes out of Austria.

Lufthansa last month resolved similar EU fears that its bid for Brussels Airlines would make it the only airline running some routes out of the Belgian capital.

Regulators approved the deal after Lufthansa agreed to sell off airport slots to rivals.

Slots are the daily periods of time airlines get to land and take off. They change hands for as much as 30 million pounds (US$48 million) a pair at Europe's busiest airport, Heathrow in London.

Anti-trust officials are also looking into whether the Austrian government is selling Austrian Airlines at a fair price to Lufthansa. They launched an investigation in February, saying they believed that the price could be too low and may be an illegal state subsidy.

Lufthansa plans to pay 366 million euros (US$509 million) to buy the Austrian government's 41.56 percent stake in the carrier.


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