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EU Deal On Alitalia's Successor In Sight - EU Commission

Published on May 27 2021 4:27 PM in General Industry tagged: Trending Posts / Alitalia / ITA / Italia Trasporto Aereo

EU Deal On Alitalia's Successor In Sight - EU Commission

Italy's plan to set up a successor to its loss-making flag carrier Alitalia has cleared a key hurdle after the European Commission that it has reached an understanding with Rome on parameters to ensur...

Italy's plan to set up a successor to its loss-making flag carrier Alitalia has cleared a key hurdle after the European Commission that it has reached an understanding with Rome on parameters to ensure the new airline is independent from the old one.

Long-running discussions between the two sides have foundered amid disagreement over its successor ceding half of Alitalia's slots at Milan Linate airport, the old brand and the loyalty programme.

EU competition enforcers want Rome to make sure that there is no economic continuity between Alitalia and its successor Italia Trasporto Aereo (ITA), otherwise the latter would be liable for the former's billions of euros in state aid received in recent years.

The possible deal between the Commission and Rome on May 26 came after a meeting between European Competition Commissioner Margrethe Vestager and Italian Economic Development Minister Giancarlo Giorgetti and Economy Minister Daniele Franco.

"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.

She said that talks with Rome will now continue at technical level while an ongoing investigation into the €1.3 billion of state aid granted to Alitalia is in the final stage.

Giorgetti said that Rome now needs to work to ensure that new Alitalia is ready to operate "as soon as possible", adding that it is reasonable to expect a start in August.

As part of the understanding, less than half of Alitalia's fleet will be transferred to ITA, as well as less than half of its aviation personnel, with new contracts, a person familiar with the matter said. The source added that ITA will retain a number of slots at Milan Linate airport depending on how many planes it gets.

The rest of Alitalia's assets, including its brand, will be tendered off, where ITA will be allowed to take part together with other interested parties, the person said.

ITA will not be allowed to take over Alitalia's loyalty programme nor its client base, it said.

Possible September Start

Italian daily newspaper Corriere della Sera reported on Saturday May 22, citing government sources, that ITA will only start flying in September - missing the peak summer holiday season.

ITA was initially expected to launch flights in April, but its chief executive said last month that services would begin in July because talks with the European Commission over state aid had reached a stalemate.

CEO Fabio Lazzerini said he wanted flights to start in time for the busy summer season as low-cost rivals including Ireland's Ryanair expanded their services.

But May 22's Corriere della Sera said that the planned start date had now been pushed forward to September because of a lack of progress in the talks between Rome and Brussels.

ITA could, however, reach a deal with Alitalia that would allow it to start selling tickets for the old carrier while it waits for the EU go-ahead to buy the rest of the Alitalia's assets, the newspaper said.

The fate of Alitalia, which employees 11,000 people in Italy, has been a political headache since May 2017, when the carrier was put under emergency administration.

Alitalia Ticket Sales

Additionally, Lazzerini said last month that ITA aimed to get control of ticket sales from the old airline as soon as possible.

"Giving up half of [Alitalia's] Linate slots is too much to ask," Lazzerini said last month, adding that ITA proposed to relinquish some slots at Rome Fiumicino airport to find a less painful deal with the EU on Linate.

Speaking in front of four parliamentary committees last month, Lazzerini said that ITA would need a strong partner to thrive.

The new company has already started talks with Air France-KLM, Delta and Virgin on one side and Lufthansa on the other over a possible alliance.

Asked last month whether the future ally could buy a stake in the new carrier, Lazzerini acknowledged that many airlines, including Delta and Lufthansa, could not make acquisitions for some time after benefiting from state-granted COVID-19 funds.

Separately, Lufthansa CEO Carsten Spohr said last month that the German carrier's stance on Alitalia was unchanged, adding that it would open to cooperation but would not invest in the Italian airline.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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