Alitalia, the EU rejects the 2019 loan of 400 million: "Italy must recover them" -

Alitalia, the EU rejects the 2019 loan of 400 million: "Italy must recover them" -

Not only the 900 million euros given to Alitalia in 2017-2018, but also the other 400 million disbursed in 2019 to the Italian company are illegal state aid. And for this they must be returned to the public coffers with lots of interest. With a decision taken several weeks ago, but only announced on 27 March 2023, the European Commission concluded that the second tranche of 400 million euros granted by Italy in 2019 to Alitalia Societ Aerea Italiana and its subsidiary Alitalia CityLiner is also illegal under EU state aid rules. Italy must therefore recover the unlawful state aid, plus interest, from Alitalia.

The second decision

The decision comes after that of September 2021 when Brussels itself had established that the first tranche supplied to Alitalia's coffers, worth 900 million euros, was illegal state aid and that therefore that amount must be returned to the Ministry of the Economy also in that case with lots of accrued interest. In theory, therefore, Alitalia - which stopped flying on 15 October 2021 to make way for Ita Airways - should pay back 1.3 billion in loans plus around 250 million in interest. But this will not happen since the company no longer exists.

The origins

It all began in May 2017 when Alitalia - after the no in the internal referendum on the restructuring plan proposed by Etihad (at the time a shareholder with 49%) - slipped into extraordinary administration. With a cash register without the money necessary to guarantee the minimum operations of the company, the government allocates 900 million euros in 2017-2018 and another 400 million in 2019. After that point, the complaints of competing carriers start. The file on the first tranche (900 million) is opened in April 2018. The folder on the second tranche (400 million) is opened at the end of February 2020.

The motivations

As with the decision on the first tranche of 10 September 2021, once again Brussels concluded that, by granting the other 400 million loan, Italy did not behave as a private operator would have done, having not assessed in advance the probability of repayment of the loans, plus interest, but aimed at guaranteeing the continuity of the service of Alitalia's national and international flights. Furthermore, according to the official note, the Commission considered that the aid could not be approved as rescue aid within the meaning of the guidelines on rescue and restructuring aid. Alitalia, the reasoning, had already benefited from previous aid, namely the loans granted in 2017. Therefore, the new loan would violate the one-off obligation under the R&R Guidelines.

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