The new Italian airline ITA can take off without the legacy of the insolvent Alitalia. The European Commission ruled on Friday that ITA was not the economic successor and was therefore not liable for it.
ITA is scheduled to start operations on October 15 and will use a fleet about half the size of Alitalia’s, initially only on European routes. The start was preceded by lengthy negotiations between Italy and the EU, which were supposed to define the conditions for renewed state aid. The Commission has now officially approved the 1.35 billion euros in aid that the Italian state intends to use to rebuild the airline over the next three years.
At the same time, the EU had decided that previous loans to Alitalia totaling 900 million euros were not compatible with European state aid law and must therefore be repaid by Alitalia with interest – this will not be possible for the airline given its catastrophic economic situation.
In the ITA case, however, the Commission argues that a private investor would have behaved in a similar way and that the company’s strategy promised profits over the next few years. Italy had subsidized Alitalia for decades, keeping it up in the air. After investor Etihad Airways from Abu Dhabi, which had acquired 49 percent in 2014, did not want to provide any further funds, Alitalia went bankrupt in 2017, but flew on thanks to state aid.
Independent experts have expressed far more skepticism about the strategy of the new Italian airline than the European Commission. Because of Alitalia’s weakness, many low-cost airlines, especially Ryanair, have established themselves on domestic routes.