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EU, Italian regulators greenlight new carrier ITA

written by Isabella Richards | July 2, 2021

The European Commission (EU) has reached a long-awaited agreement to green-light Italy’s new flag carrier, Italia Transporto Aereo (ITA).

Brussels and Rome also decided the new airline would not carry the debts of its bankrupt predecessor, Alitalia, which received billions in state aid.

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Alitalia has been bankrupt since 2017, only surviving through government loans. The latest bailout round, earlier this year, saw the Italian government provide the business with €3 billion after furloughing even more staff due to the pandemic.

On Wednesday this week, Margrethe Vestager, the Commission Competition Commissioner, met with Italy’s ministers to make the final decision.

“Following intense and constructive discussions at all levels, the Commission and the Italian authorities have reached a common understanding on the key parameters to ensure economic discontinuity between ITA and Alitalia,” a Commission spokesperson said.

This follows months of EU officials demanding financial separation. Now, with approval, ITA can accelerate its operations and begin hiring around 5,000 employees.

Current negotiations suggest ITA will only be granted half of Alitalia’s airport slots, and just under half of both its aircraft fleet and existing workforce. However, Italy’s new venture will not be allowed to retain Alitalia’s branding, loyalty program, or client base.

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The remainder of Alitalia’s assets will be tendered off, in a process where ITA will be allowed to bid together with other interested parties.

Minister for Economic Development Giancarlo Giorgetti said earlier this month ITA should be operational “as soon as possible, reasonably in August”, despite a few more hurdles to face, he said.

Reuters obtained access to a draft decree, which said the Commission declined to comment on Rome’s plan to extend to December the €400 million bridge loan granted to Alitalia.

“It is for member states to assess whether a measure involves state aid that needs to be notified to the Commission under EU rules,” the spokesperson said.

When it was announced earlier this year that Alitalia would receive additional financial aid, many industry leaders and politicians were enraged as the continuous funding for a money-losing company seemed illegal.

Ryanair launched an appeal against the €3 billion injections by the Italian government early this month, Eddo Wilson, the airline’s chief executive, said, “We will defend our interest by appealing against this umpteenth loan.”

No outcomes have been disclosed, however Wilson expressed his disagreements with the new carrier.

EU, Italian regulators greenlight new carrier ITA Comment

  • Peter

    says:

    What has it got to do with Ryanair. what the govt does in Italy. Glad they do not fly to Australia. We have better laws than EU. But then you have to consider where Ryanair are based. They should get a golden leprechaun of their own.

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