The European Union's anti-trust authority has launched an investigation into German carrier Lufthansa's effort to acquire a 41% stake in Italy's ITA Airways.
Anti-trust regulators temporarily blocked the deal on Tuesday, citing fears it might hurt competition.
Lufthansa said it would press for a swift resolution of the matter, and it believed the transaction would be greenlit.
The European Commission must make a final decision by June 6 this year.
What do we know about the deal?
Lufthansa agreed last year to take over a minority stake of 41% in ITA, for €325 million (approximately $350 million). The deal with the Italian state also stipulated that the Italian Finance Ministry would contribute €250 million.
Under certain conditions, the German carrier can acquire an additional 49% of ITA shares starting from 2025. It may also gain control of the remaining 10% at a later date.
The European Commission expressed competition concerns after being notified of the transaction by Lufthansa in November. Earlier this month, Lufthansa submitted commitments to address some of those concerns.
"However, these commitments were insufficient, in terms of both scope and effectiveness, to clearly dismiss the commission's preliminary concerns," the EU Commission said in a statement.
The EU's competition commissioner, Margrethe Vestager, said the EU wanted to make sure that the deal did not lead to "higher prices, less capacity or lower quality for passenger air transport services in and out of Italy".
rmt/lo (AFP, dpa, Reuters)