New lifeline for Alitalia: EU approves €200 million aid
The European Union (EU) Commission has approved a grant worth €200 million for Italian flag carrier Alitalia. The aid should resuscitate the airline and help alleviate the consequences of COVID-19. However, financial struggles had tortured the airline long before the pandemic began.
Alitalia would receive a €200 million financial support from the Italian government, the EU Commission announced in a statement on September 4, 2020.
The air carrier will get the State aid without regard to the fact it had been loss-making even before the pandemic hit the aviation industry.
Margrethe Vestager, the EU Antitrust Chief, stated that the State aid covered Alitalia’s losses that were directly related to COVID-19 travel restrictions. According to Vestager, €200 million grant for Alitalia was “in line with EU State aid rules”.
“This measure will enable Italy to compensate Alitalia for the damage directly suffered due to the travel restrictions necessary to limit the spread of the coronavirus. The aviation industry is one of the sectors that has been hit particularly hard by the coronavirus outbreak‘‘, Vestager stated in the European Commission’s press release.
It is not the first time Alitalia receives financial support. Italy's largest air carrier filed for bankruptcy in 2017. Over the time, there were several attempts to reanimate the struggling airline by reinjecting the state aid. In 2017, Alitalia received almost €900 million in loans for the restructuring process. Two years later, in 2019, the carrier was granted by another €400 million loan for the same purpose.
However, the large amounts of financial support raised doubts whether the airline’s restructuring process was being carried out according to the law. Due to a mass of complaints over competition policy issues, the EU Commission opened a formal investigation procedure on €900 million loans in 2018 and a separate formal investigation procedure on an €400 million loan in October 2019.
JetBlue says booking trends have stabilized after Delta blip in Q3
JetBlue says booking trends have stabilized after a rise in COVID-19 cases hit September bookings ...
Finnair losses continue with Asia shut to international travel
Finnair expects Asia markets will mostly stay closed until 2022, hurting its financial results ...
American Airlines bullish on demand even after Delta variant hits Q3 recovery
American Airlines is confident about travel demand, even after the spread of the Delta variant pushed the airline into a...