Brussels (Brussels Morning) The EU Commission has approved Italian state aid worth 73 million euro for the Alitalia flag carrier, which has posted losses due to the coronavirus crisis, Reuters reports. According to the Commission, the measure is deemed proportionate and acceptable.
“The route-by-route quantitative analysis submitted by Italy appropriately identifies the damage attributable to the containment measures, and therefore the compensation does not exceed what is necessary to make good the damage on those routes,” the EC notes.
In September, the Commission had approved state support of 199.45 million euro to the airline to offset the impact of pandemic control restrictions.
EU Commissioner for Competition Margrethe Vestager referred to the EC’s ongoing investigation of loans worth 1.3 billion euro granted in 2017 and 2019 to Alitalia, which Italy looked to renationalise.
“Our investigations into past support measures to Alitalia are ongoing and we are in contact with Italy on their plans and compliance with EU rules,” Vestager stated.
Rome has earmarked 3 billion euro for the re-nationalisation plan, which includes founding a new company that would buy the flagship carrier’s good assets and draw up a new strategy in cooperation with the government, Reuters reported earlier this month.
Alitalia went through 11 difficult years of private management and saw three failed restructuring attempts, with the coronavirus crisis foiling government plans to privatise the company.
CEO-elect Fabio Lazzerini predicted the new company, a downsized Alitalia, could break even in 2022, after the company spent approximately 8 billion euro of taxpayer money in the last four years or so. He noted negotiations with two potential strategic partners were underway and that a deal should be reached next year.
The new Alitalia is to present its 2021-2025 plan to the government and the EU Commission for approval. If EU authorities find the break between the old and the new company not clear, the new company may be asked to return state aid the old company received.