EU Approves Additional €73m Aid for Alitalia

The European Commission has approved a second tranche of Italian aid in favor of national carrier Alitalia as compensation for operating losses due to the coronavirus (Covid-19) pandemic.

The Italian support, worth 73.02 million euros, aims to compensate the airline for direct damages suffered on 19 routes from June 16 to October 31, due to the travel restrictions necessary to limit the spread of the coronavirus.

The measure follows the Commission’s decision in September to approve an Italian damage compensation measure – worth 199.45 million euros – in favour of Alitalia to compensate the airline for the damage suffered from March 1 to June 15, resulting from governmental restrictions and containment measures taken by Italy and other destination countries due to the pandemic.

However, the travel restrictions further affected Alitalia’s operations, in particular its international and intercontinental flights, leading the airline to incur operating losses until at least October 31.

Italy notified the Commission of an additional aid measure – in the form of a 73.02 million euros direct grant – to compensate the airline for further damages suffered on 19 specific routes between June and October.

The Commission found the Italian support measure to be in line with EU State aid rules.

Photo source: Alitalia

“At the same time, our investigations into past support measures to Alitalia are ongoing and we are in contact with Italy on their plans and compliance with EU rules,” Executive Vice-President Margrethe Vestager, in charge of competition policy, said.

It is reminded that following complaints received, on April 23, 2018, the Commission opened a formal investigation procedure on 900 million euros loans granted to Alitalia by Italy in 2017. On February 28, 2020, the Commission opened a separate formal investigation procedure on an additional 400 million euros loan granted by Italy in October 2019. Both investigations are ongoing.

A major network airline operating in Italy, Alitalia in 2019 and with a fleet of over 95 planes served hundreds of destinations all over the world, carrying about 20 million passengers from its main hub in Rome and other Italian airports to various international destinations.