Alitalia under scrutiny of a double investigation
The Italian authorities opened an investigation to determine whether or not Etihad Airways was directly responsible for the bankruptcy Alitalia declared on May 11, 2017. The probe started on May 22, 2018, by a police raid in the headquarters of the Italian flag carrier.
The prosecutor of Civitavecchia court (where the headquarters are located) opened an investigation for fraudulent bankruptcy “under the assumption that the management appointed by the (Emirati) company is responsible for a loss of €400 million,” according to local media La Repubblica.
During the Italian Financial Police raid documents and computers were seized. Consequently, three last CEOs of Alitalia - Silvano Cassano, Luca Cordero di Montezemolo and Mark Ball Cramer - are now under scrutiny. They will have to answer, for example, to the suspicious sale of several Alitalia slots to its parent company Etihad.
Despite owning 49% of the company that it acquired back in 2014, Etihad was not in charge of the company’s administration. The management was in the hands of the shareholders of Cai-Midco, a holding company with 51% of Alitalia’s capital regrouping the banks UniCredit and Intesa Sanpaolo, the Poste Italiane and several other private investors.
In the meantime, the sale of Alitalia is still debated. Three offers have been made, including one by European giant Lufthansa (LHAB) (LHA) which the former Minister of Economic Development, Carlo Calenda, called “the most promising”, another one by U.S. company Delta Airlines (DAL) and the third one by Hungarian LCC Wizz Air.
However, the sale could be compromised by the political landscape of Italy. The coalition majority formed of the two right-wing parties (the League and the Five Stars Movement) that came first in the Italian general election of March 4, 2018, have presented a draft of their political program in which they state that Alitalia should “remain Italian” and be revitalized through a “national strategic plan”.
Another obstacle comes in the way of Alitalia’s survival: in May 2017, after the airline employees rejected another austerity plan, leading to the company’s bankruptcy, the Italian government granted a loan of €300 million, followed by an additional €600 million in October 2017. The European Commission opened an investigation on April 23, 2018, to determine if the loan was or not a state subsidy, which could infringe the European competition laws.
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