Tuesday 21 August 2018

EU probes state aid in Alitalia rescue

Italy is keen to find a buyer for troubled Alitalia, which has around 12,000 staff, that won’t result in large cuts to the current headcount at the airline – Lufthansa’s bid was for only half the workforce
Italy is keen to find a buyer for troubled Alitalia, which has around 12,000 staff, that won’t result in large cuts to the current headcount at the airline – Lufthansa’s bid was for only half the workforce

Foo Yun Chee

The European Commission has launched an in-depth investigation to assess whether an Italian government rescue loan to Alitalia constituted state aid. The bankrupt airline has used the loan to stay open while it seeks a buyer.

EasyJet, Lufthansa, Air France-KLM, and Wizz Air have reportedly tabled interest in buying the whole or part of the group.

The EU Competition Commission will investigate whether Italy's decision to grant the rescue loans breached the bloc's state aid rules.

The Commission can order Italy to recover the money if it finds that the aid is illegal.

Alitalia, in which Etihad Airways holds a 49pc stake, was placed under extraordinary administration in May 2017. Italian authorities have opened a tender process, effectively an auction, aimed at finding a buyer for its assets.

Earlier this month, the Italian Industry Ministry said one of the three offers received for Alitalia provided "concrete steps forward in terms of routes and personnel".

EasyJet has said it submitted a revised expression of interest in Alitalia as part of a consortium, while Lufthansa said it had submitted a document setting out its ideas for a 'new' Alitalia.

Budget carrier Wizz Air, which said in January it would only be interested in the short-haul business, has also reportedly made an offer.

The Italian government has been seeking new investors for almost a year, but the sale process was delayed as a result of uncertainty over last month's national election, which ended in a hung parliament.

All political parties, which have yet to find a compromise on the formation of a coalition government, will be consulted about the terms of the sale negotiations, the ministry said in a statement.

Alitalia was once a symbol of Italy's post-war economic boom, but it now struggles to compete against low-cost carriers and high-speed trains at home.

With a headcount of about 12,000, Italy wants a buyer willing to guarantee the airline's survival without having to make big staff cuts.

Germany's Lufthansa in November said its offer was for a large part of Alitalia's fleet, but only half its staff. Details of its new offer have not been released.

To facilitate ongoing talks, the Industry Ministry said it would extend the mandate of Alitalia's three commissioners that is due to expire at the end of the month. (Reuters)

Irish Independent

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