The European Commission has concluded following a three-year investigation that a loan of EUR400 million euros (USD431 million) the Italian government handed to Alitalia (AZA, Rome Fiumicino) and its subsidiary Alitalia CityLiner in 2019 was illegal under European Union state aid rules.
The predecessor of state-owned flag carrier ITA Airways (AZ, Rome Fiumicino) never repaid the money, and “Italy must therefore recover the illegal state aid, plus interest, from Alitalia,” the commission outlined in a statement on March 27.
Rome announced that it would grant the loan in November 2019 after potential rescuers of the bankrupt airline walked away from a deal. Italy’s Senate approved the bailout in late January 2020. The European Commission opened an investigation into the loan one month later.
“Italy did not act like as a private operator would have done, as it did not assess in advance the probability of repayment of the loans, plus interest, but aimed at ensuring the uninterrupted service of Alitalia’s domestic and international flights,” the commission said in the statement.
The money, it said, “could not be approved as rescue aid under the Guidelines on Rescue and Restructuring aid. In particular, Alitalia had already benefited from previous aid, namely the two loans granted in 2017.” That year, Rome had given the loss-making carrier a total of EUR900 million (USD971 million) to keep it operating. This was also never repaid, and in 2018 the European Commission opened a probe into it, concluding in September 2021 that it was illegal.
The Commission continued in its latest statement on the EUR400 million aid that “no private investor would have granted the loan to the company at the time and the loan gave Alitalia an unfair economic advantage vis-à-vis its competitors on national, European, and world routes, which amounted to incompatible state aid.”
However, it stressed that although ITA Airways acquired some of Alitalia’s assets in 2021, it “is not the economic successor” of the former flag carrier and is not liable to repay the funds.
A non-confidential version of the latest European Commission decision will be published on its website under the number SA.55678 in the state aid register, once any confidentiality issues have been resolved, the statement concluded.
Italy’s economy minister, Giancarlo Giorgetti, commented on March 27 that “the conclusions of the EU Commission were awaited and widely expected,” adding that “ITA’s exclusion from requests for repayment of the bridging loan to Alitalia is proof that we are right and will continue on this path,” the country’s ANSA news agency reported.
