Brussels, 27 March 2023
The European Commission has concluded that a State loan of €400 million granted by Italy in 2019 to Alitalia Società Aerea Italiana S.p.A. and its wholly-owned subsidiary, Alitalia CityLiner S.p.A. (jointly ‘Alitalia’) is illegal under EU State aid rules. Italy must therefore recover the illegal State aid, plus interest, from Alitalia.
In May 2017, the Italian airline Alitalia was placed into special bankruptcy proceedings under Italian bankruptcy law, continuing however to operate as an airline. In order to keep Alitalia operating, in 2017 and in 2019, Italy granted the company loans for the amount of €900 million and €400 million, respectively. These loans have never been repaid.
In 2018, the Commission opened a formal investigation to establish whether two loans granted in 2017 (for total €900 million) were in line with EU State aid rules. In February 2020, the Commission opened a formal investigation to establish whether the additional State loan of € 400 million granted by Italy on 26 October 2019 was in line with EU State aid rules. In September 2021, the Commission concluded that the €900 million State loans to Alitalia were illegal under EU State aid rules.
Today the Commission has concluded that, when granting the € 400 million State aid loan in 2019, Italy did not act like as a private operator would have done, as it did not assess in advance the probability of repayment of the loans, plus interest, but aimed at ensuring the uninterrupted service of Alitalia’s domestic and international flights.
Furthermore, the Commission found that the aid could not be approved as rescue aid under the Guidelines on Rescue and Restructuring aid. In particular, Alitalia had already benefitted from previous aid, namely the two loans granted in 2017. Therefore, the new loan would be in breach of the one-time-last-time requirement under the Rescue and Restructuring Guidelines.
On this basis, today the Commission has concluded that no private investor would have granted the loan to the company at the time and that the loan gave Alitalia an unfair economic advantage vis-à-vis its competitors on national, European and world routes, which amounted to incompatible State aid. Italy must now recover the illegal State aid amounting to €400 million plus interest from Alitalia. The Commission has already found in September 2021 that ITA Airways, which had acquired some of Alitalia assets in 2021, is not the economic successor of Alitalia and that therefore it is not liable to repay the illegal State aid received by Alitalia.
The non-confidential version of the decision will be made available under the number SA.55678 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.
Source – EU Commission