In order to comply with EU state assistance regulations, Alitalia, the forerunner of Italian state-owned airline ITA Airlines, will be required to repay the Italian government a loan of 400 million euros ($430 million), the EU competition regulators announced on Monday. Two years after providing a 900 million euro loan to keep the loss-making corporation operational, Italy approved the loan in 2019. Never did the carrier pay back the money. Thereafter, the European Commission, which serves as the 27-nation bloc's competition watchdog, declared that both loans constituted unlawful state aid.
The EU executive stated in a statement that "no private investor would have approved the loan to the company at the time and the financing gave Alitalia an unfair economic advantage vis-Ã -vis its competitors on national, European, and global routes." According to Arianna Podesta, a spokeswoman for the commission, the loan may be listed as a liability in the ongoing insolvency procedures for Alitalia. She said during a daily news conference, "The 400 million would be reimbursed by Alitalia within the limitations of the earnings obtained from the sale of the company's assets and the value of any residual assets.
In 2021, the Commission issued an order requiring Alitalia to pay back the 900 million euro illegal loan. Giancarlo Giorgetti, the minister of economy for Italy, said the EU executive's decision was "expected and generally anticipated" and expressed relief that the loan payback request does not apply to ITA Airlines, Alitalia's replacement. Alitalia received an estimated 10 billion euros from successive governments throughout the course of its final 14 years of operation, despite significant losses and poor management.
ITA was founded in 2020 and is still not profitable. German airline Lufthansa is negotiating with the Italian government to acquire a 40% stake in the airline with the intention of acquiring the remaining shares in the future.