Daily Management Review

EU Approves ITA While Ordering Alitalia To Repay 900 Mln Euros Illegal Aid


According to the European Commission, a capital injection of 1.35 billion euros by Italy into ITA, scheduled to be done in the next three years, is consistent with European Union’s state aid rules. The Commission said that the aid provided to ITA will be made according to market conditions.
The Italian government has allocated 3 billion euros to ITA. However, the Commission will need to approve the funds injection for the remaining 1.65 million euros.
ITA will operate with a fraction of Alitalia’s aircraft fleet and will be permitted to take over a small portion of its predecessor's maintenance and handling businesses. Alitalia's brand name will be sold via an open tender.
Alitalia received 900 million euros from the Italian government in 2017. This was after the carrier was struggling to survive following a restructuring plan rejected by its workers.
Alitalia was then managed by state-appointed administrators. The state also granted Alitalia additional funds to enable it to survive. This included a loan of 400 million euros, which is currently under investigation by the EU.
Alitalia will sell some assets to the new state-owned ITA in the next few weeks under a government plan.
The Commission's decision on Friday is not surprising to the Italian government. It had negotiated for months with Brussels in order to avoid the possibility that the verdict regarding the 900-million Euro loans would hinder the launch ITA.
Brussels stated Friday that ITA is not liable for illegal state aid received Alitalia.
ITA will begin flying on October 15th and will only employ a small portion of Alitalia’s total workforce of 11,000.