EU orders Italy to recover “illegal state aid” from Alitalia – Action News Jax

BRUSSELS – (AP) – The European Union’s antitrust watchdog on Friday ordered Italy to recover 900 million euros ($ 1.01 billion) from ailing airline Alitalia, saying it an investigation concluded that the loans constituted illegal state aid.

Alitalia has been in financial trouble since 2008. The airline was in desperate need of funds in 2017, but lost access to credit markets due to its difficulties. To keep it afloat, the Italian government intervened by granting two loans of 600 million and 300 million euros.

At the same time, the carrier initiated special bankruptcy proceedings. The following year, the European Commission, which monitors competition law in the 27 EU member countries, opened an investigation into government loans.

“The in-depth investigation showed that firstly the loans constitute state aid for Alitalia, and secondly that they are illegal under state aid rules”, said the Executive Vice-President of the Commission Margrethe Vestager in a press release.

“Both loans gave Alitalia an unfair advantage over its competitors on national, European and global routes. Therefore, they constitute illegal state aid and must now be recovered by Italy from Alitalia, ”Vestager said.

She said the loans could not be considered rescue aid under the troubled business rules because they had not been repaid within six months and because no restructuring plan had been agreed. to put the airline back in the dark.

Italy’s Economy Ministry announced in July that a new airline to replace Alitalia would take off on October 15. Alitalia’s last flights should be operational by then. The ministry said the new carrier will be called ITA, which stands for Italia Trasporto Aereo, or Italy Air Transport.

The commission also said on Friday that ITA would not be seen as Alitalia’s economic successor and that a capital injection totaling 1.35 billion euros ($ 1.6 billion) into the new company is in line with market conditions and, as such, is not considered unlawful state aid. .

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