Alitalia adds a new headache in the middle of a crisis due to the expansion of the coronavirus. The European Commission announced on Friday the opening of an investigation into the legality of the 400 million euro loan granted to the airline in December by the Italian Government. Brussels will study in depth whether the money given by the authorities constitutes an illegal State aid, which would mean breaking the Community competition rules.
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The intention of the Italian Executive was to prevent the company from stopping while finding investors interested in refloating the airline. But the complaints presented before the possibility that the aid breaches the European laws to get out of trouble to companies in difficulty have led Brussels to initiate the investigation.
The airline that for seven decades was the flag company of the transalpine country goes through a delicate moment. Without benefits since 2002, in 2017 it entered into a bankruptcy contest after rejecting its workers the restructuring plan. In the last three years it has worked with assisted breathing thanks to successive injections of public money, a practice that the European Commission observes with suspicion. The Community Executive has already opened another investigation in 2018 for a 900 million bridge loan granted to Alitalia by the Government shortly after bankruptcy. With no decision yet on those inquiries, cases with the name of Alitalia accumulate on the table of the relentless Danish Competition Commissioner, Margrethe Vestager.
The moment can hardly be more inopportune for the company. Italy has been the European country most hit by the coronavirus. The rapid growth of those infected has caused a cascade of cancellations. And Alitalia announced Friday that it has reduced flights on 38 national and international routes due to low flight occupancy. He gives as an example the case of the connection between Genoa and Rome, where 62% of the seats have been empty compared to a previous average of 34%.
The Italian Government must therefore continue the search for buyers in a complicated context on two fronts: to convince Brussels that the aid granted to Alitalia is legal and should not be returned, and to deal with the health crisis of the coronavirus.
