Italy is under scrutiny again from the European Union over its latest bailout to Alitalia.
The Chamber of Deputies, Italy’s lower house, approved a 400 million Euro bailout in late January after the Senate approved the measure in December. The loan will keep the lights on at Alitalia until at least midyear, but includes a clause which mandates payback within six months with interest. It also states that the point of the loan is “to facilitate the streamlining of the company in order to attempt to sell its assets.”
Now the European Union is investigating the loan, issuing the following statement:
“The European Commission has opened an in-depth investigation to assess whether Italy’s €400 million loan granted to Alitalia constitutes state aid and whether it complies with the rules on state aid to companies in difficulty.”
State aid is legal if it is made on similar terms to what a private firm would have accepted on the open market. Consequences for an illegal loan under EU rule can include harsh fines.
But I have to imagine that Alitalia is not all that nervous today. After all, Italy provided Alitalia a 900 million Euro bridge loan in 2017. That also launched an EU probe in April 2018…which remains ongoing.
Alitalia continues to lose money on a daily basis and COVID-19 certainly cannot be helping matters.
CONCLUSION
Alitalia is an Italian fixture. Like Air India and South African Airways, it is not going anywhere anytime soon. Whatever the EU investigation ultimately reveals, I suspect it won’t matter as long as Italy wants to preserve its flag carrier.
> Read More: Alitalia Loses 2 Million Euros…Per Day
> Read More: Alitalia Cuts Two Routes, Ditches 777-300ER And A330-200s
image: Alitalia
Is there any possible way for you to please make it so that your entire articles open in feedly, instead of having to click multiple times to get to the website to read? Other blogs I follow all are able to do this, I was wondering if you can please try to do this as well as it makes it a lot more readable.
No, it is not.
“But I have to image that Alitalia is not all that nervous today. After all, it provided Alitalia a 900 million Euro bridge loan in 2017.”
I mean, I understood what you are trying to say, but this needs a bit of fixing…
And not surprisingly we haven’t heard a peep out of Ed Bastion or Delta. Where’s all that righteous indignation about unfair government support of airlines?
Correct!
Matthew, you are right on point about all three.
The only reason SAA would go under is if the government runs out of money to given them (i.e. they can’t borrow) and/or the IMF forces them into dissolving SAA to receive a bailout. If that occurs the SA unions will do what they do best – protest.
And this is why in spite of the talk, Lufthansa will never invest in Alitalia.
@Phil Duncan: I wonder why LH is even talking?? EK invested $500m and received nothing. The only way an investment would work in either Alitalia or Air India would be if the government allowed them to deal with the manpower and route issues, which even if they did would result in protest ciaos…. IMO