Brussels backs €25mn aid to Alitalia, blocks ITA over slots

Even as the European Commission found on March 26 that EUR24.7 million euros (USD29.1 million) in Italian support in favour of Alitalia (AZ, Rome Fiumicino) between November 1 and December 31, 2020, was in line with tweaked Covid-era EU state aid rules, it took the wind out of the sails of its anointed successor ITA – Italia Trasporto Aereo by reportedly demanding it renounce many of its airport slots. While acknowledging that two investigations on loans to the Italian flag carrier, provided in 2018 and 2019, are still ongoing, EU antitrust czar Margrethe Vestager said that Rome could now “provide further compensation for direct damages suffered by Alitalia between November and December” as a result of the bloc’s continuing travel restrictions. The announcement followed earlier decisions in September and December last year to approve Italian measures compensating the airline for damage suffered amid governmental restrictions between March 1 and 15 June, and June 16 to October 31, respectively. However, Brussels threw the wheel chocks on its talks with Rome over a restructuring plan meant to transform Alitalia into the leaner, nationalised ITA as the European Commission requested that it yield a significant number of its slots, the newspaper Il Messaggero reported. The Italian government considers the slots, in particular those at Milan Linate, to be a vital part of the newco’s industrial plan and future strategy, and renouncing them would take away the lifeblood and the sustainability of the company’s accounts, sources told the daily. Alitalia’s maintenance and groundhandling units must also be sold, according to Brussels. Under the industrial plan, ITA should take over the brand, slots, and some assets of the oldco if it is to start flying with a trimmed-down fleet in time to catch the Italian carrier’s important summer season. But EU clearance is needed for both the nationalisation and the injection of another EUR3 billion (USD3.5 billion) of taxpayers’ money into the new carrier. Yet another postponement to the launch of ITA seriously jeopardises the fate of Alitalia’s 11,000 employees and the fate of the newco itself, government and union sources told the newspaper. Alitalia currently operates 67% of the slots at Linate, according to the Corriere della Sera newspaper, and Brussels reportedly wants to see this cut to less than 50%. Ryanair (FR, Dublin Int’l) has said it would take part in a tender, if one was arranged, to buy slots both there and at Rome Fiumicino. Last year, Lufthansa (LH, Frankfurt Int’l) was compelled to abandon 24 slots at each of its Frankfurt Int’l and Munich hubs in return for its EUR9 billion (USD10.6 billion) bailout. Sources confirmed to Reuters that the European Commission was demanding a significant cut in the number of slots Alitalia would transfer to ITA. However, the European Commission has declined to comment. Claudio Tarlazzi, general secretary of the union UILTrasporti, and its national secretary Ivan Viglietti condemned the European Commission’s stance in a statement on March 27, branding its conditions “unacceptable, inadmissible, and totally penalising for the start of the new ITA; the Italian government should go ahead alone and protect the national interest.” “It is clear that [Vestager] is pursuing the interests of European competitors. On Alitalia, she is not as impartial as she should be and is acting as an armed wing of other major and low-cost carriers. […] The approach of the competition commissioner reveals a strongly discriminatory approach towards Italy, with rules that ensure the new Alitalia-ITA is born so weak and so mutilated that it is not able to survive let alone be profitable.” A demonstration at Fiumicino on March 26 involving more than 3,500 people, according to the union, will be followed by another protest on April 14 at the Ministry of Economic Development, the UILTrasporti statement concluded.