NEWS » Alitalia on the brink again
Alitalia on the brink again
Alitalia, the Italian airline, founded 67 years ago, is in danger of bankruptcy once again.
The company is losing 700 thousand Euros per day and is in need of an investment of 500 million Euros in order not to fail.
The Italian Government rescue plan foresees the intervention of state-owned postal service, “Poste Italiane” with a loan of 75 million Euros.
The bailout plan has been criticized by Italian main business associations for lacking a long term strategy, and the hypothesis of a State aid intervention has been opposed by the European commission, because it might not be compatible with the EU law.
As all states are obliged to notify the Commission when it comes to State aid, the EC expressed concern because it had not been given advance notice of the rescue measures by its largest shareholders, in order to confirm that these measures were compatible with EU law. State aids can be seen as protectionism and lead to illegal competition with other airlines.
Let’s recap the recent history of Alitalia Bailout plans.
Alitalia was privatized in 2008 during a government led by former conservative premier Silvio Berlusconi. In 2008, Air France-KLM offered to invest up to 6.5 billion Euros to give new strength to Alitalia, despite union opposition. But Berlusconi, who promised in his election campaign to keep the airline in Italian hands, rejected the takeover bid.
On October 10th, the government said that the Italian state-owned postal service, “Poste Italiane” could intervene with a loan of 75 million Euros for Alitalia, but the intervention would not be enough to revive the fortunes of the company.
The airline Air France / KLM already owns a 25 per cent stake in the Italian company and has offered several times to increase its share in Alitalia. Now the company could intervene, according to the government, with another 75 million Euros.
Immsi , Atlantia and Intesa Sanpaolo , which are part of the consortium of Italian businessmen who bought Alitalia in 2008, could put an additional 75 million Euros .