Newly-born Italia Trasporto Aereo (ITA) will replace the loss-making Alitalia. The Treasury of Italy has reached a deal with the European Commission for ITA to replace the current debt-ridden Alitalia on October 15, 2021 with 52 aircraft.
The ITA SpA Board of Directors today under the chairmanship of Alfredo Altavilla, met and approved the guidelines of the 2021-2025 Business Plan.
ITA will be able to acquire the assets necessary to manage the flight division through direct negotiation with Alitalia currently in Extraordinary Administration.
ITA will start with a slot allocation consistent with the initial size of its fleet, maintaining 85% of the slots currently held by Alitalia at Milan Linate Airport and 43% of the slots at Rome Fiumicino International Airport, the latter being less congested than Linate and with a greater availability of slots that can be acquired to support the growth in flights expected over the period of the plan.
The European Commission has found that an Italian aid measure of €39.7 million to support Alitalia is in line with EU State aid rules. This measure aims at compensating the airline for the damages suffered on certain routes due to the coronavirus outbreak during the period between 1 March and 30 April 2021.
Alitalia is a major network airline operating in Italy. With a fleet of over 95 planes. In 2019, the company 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.
The restrictions put in place in Italy and other countries to limit the spread of a second and third wave of the coronavirus pandemic have heavily affected Alitalia’s operations. As a result, Alitalia incurred significant operating losses until at least 30 April 2021.
On 25 June 2021, Italy notified to the Commission an additional aid measure to compensate Alitalia for further damages suffered on certain specific routes from 1 March to 30 April 2021 due to the emergency measures necessary to limit the spread of the virus. The support will take the form of a €39.7 million direct grant, which corresponds to the estimated damage directly caused to the airline in that period according to a route-by-route analysis of the eligible routes. This follows the Commission decisions of 12 May 2021, 26 March 2021, 29 December 2020 and 4 September 2020 approving Italian damage compensation measures in favour of Alitalia, compensating the airline for the damages suffered from 1 to 31 January 2021, 1 November to 31 December 2020, 16 June to 31 October 2020 and 1 March to 15 June 2020 respectively.
The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or sectors for damage directly caused by exceptional occurrences. The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having significant economic impact. As a result, exceptional interventions by the Member State to compensate for the damages linked to the outbreak are justified.
The Commission found that the Italian measure will compensate for damages suffered by Alitalia which are directly linked to the coronavirus outbreak that qualifies as exceptional occurrence. The damage is calculated as the loss of profitability on certain routes due to the travel restrictions and other containment measures during the relevant period. It also found that the measure is proportionate, as the route-by-route quantitative analysis submitted by Italy appropriately identifies the damage attributable to the containment measures, and therefore the compensation does not exceed what is necessary to make good the damage on those routes.
On this basis, the Commission concluded that the additional Italian damage compensation measure is in line with EU State aid rules.
Based on complaints received, on 23 April 2018 the Commission opened a formal investigation procedure on €900 million loans granted to Alitalia by Italy in 2017. On 28 February 2020, the Commission opened a separate formal investigation procedure on an additional €400 million loan granted by Italy in October 2019. Both investigations are ongoing.
Financial support from EU or national funds granted to health services or other public services to tackle the coronavirus situation falls outside the scope of State aid control. The same applies to any public financial support given directly to citizens. Similarly, public support measures that are available to all companies such as for example wage subsidies and suspension of payments of corporate and value added taxes or social contributions do not fall under State aid control and do not require the Commission’s approval under EU State aid rules. In all these cases, Member States can act immediately.
When State aid rules are applicable, Member States can design ample aid measures to support specific companies or sectors suffering from the consequences of the coronavirus outbreak in line with the existing EU State aid framework. On 13 March 2020, the Commission adopted a Communication on a Coordinated economic response to the COVID-19 outbreak setting out these possibilities.
In this respect, for example:
- Member States can compensate specific companies or specific sectors (in the form of schemes) for the damage suffered due and directly caused by exceptional occurrences, such as those caused by the coronavirus outbreak. This is foreseen by Article 107(2)(b)TFEU.
- State aid rules based on Article 107(3)(c) TFEU enable Member States to help companies cope with liquidity shortages and needing urgent rescue aid.
- This can be complemented by a variety of additional measures, such as under the de minimis Regulation and the General Block Exemption Regulation, which can also be put in place by Member States immediately, without involvement of the Commission.
In case of particularly severe economic situations, such as the one currently faced by all Member States due the coronavirus outbreak, EU State aid rules allow Member States to grant support to remedy a serious disturbance to their economy. This is foreseen by Article 107(3)(b) TFEU of the Treaty on the Functioning of the European Union.