Alitalia must change brand, European Commission says

Alitalia (AZ, Rome Fiumicino) must be relaunched under another brand if the European Commission is to approve Italy’s plans to relaunch the airline, according to a letter from Brussels leaked to and published by the news magazine L’Espresso. “The Alitalia brand should not be retained by the newco, since it is an emblematic indicator of continuity,” said the nine-page letter dated January 8 and which the magazine published on January 19. The letter to Prime Minister Giuseppe Conte’s cabinet warned that the European Union competition watchdog may choose to block the planned relaunch of the nationalised flag carrier. The Italian state plans to inject at least EUR3 billion euros (USD3.6 billion) into the newco, given the company name ITA – Italia Trasporto Aereo (AZ, Rome Fiumicino). Asking Rome for guidance by listing 62 questions about the airline’s rescue, the European Commission said it worried that the project was merely “a simple corporate transfer operation without discontinuity with the old company.” “The new company cannot be called Alitalia in any way, or recall this brand, its slots must be sold, and the MilleMiglia loyalty scheme in its entirety cannot be transferred to the newco,” stressed the letter, the consequences of which could postpone the launch of the new company, scheduled for April, L’Espresso speculated. Brussels reiterated in the letter that “the newco should not retain the combined aviation, ground handling, and maintenance businesses,” units which must be split from the loss-making airline and sold separately. It urged the Italian government to begin an “open, transparent, non-discriminatory, unconditional tender” to sell these Alitalia assets to a third party, rejecting the idea that the oldco could sell them to the newco in a private transaction. According to local media, such a move would inevitably mean job cuts among Alitalia’s more than 11,000 employees outside the core aviation business. Alitalia had not responded to ch-aviation’s request for comment at the time of going to press.