The European Commission (EC) has reportedly reached a consensus with the Italian government on means for separating ailing Alitalia from its successor Italia Trasporto Aereo (ITA). The move marks a step further in securing EU’s approval for the so-called “new Alitalia”. 

"Following intense and constructive discussions at all levels, the Commission and the Italian authorities have reached a common understanding on the key parameters to ensure economic discontinuity between ITA and Alitalia," a Commission spokesperson told Reuters on June 1, 2021.

The EU Commission has long been talking with the Italian government about how the transition from Alitalia to the new airline would work out. The Commission emphasized that Italy’s plan to create a new airline that could replace Alitalia might turn out well only if the new carrier would be fully independent of the old one. 

"I continue to believe we can find a workable solution. ITA has to be a real company, there has to be discontinuity otherwise ITA would be liable for Alitalia," European Commission Competition Commissioner Margrethe Vestager said during a news conference earlier in May 2021.

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As Italy plans to establish a new airline, ITA, to be its flag carrier, the EU Competition Commissioner warns to seek independence from the ailing Alitalia.
 

The EU Commission is yet to approve the business plan of Italy’s new flag carrier, under which ITA is expected to start flying with 45 aircraft putting emphasis on short and medium-haul operations. The new Italian airline was initially set to begin operations in April 2021. But due to heated negotiations between the Italian government and the EU Commission, the plan was postponed.

The two sides - EC and the Italian government - had previously disagreed over ITA taking half of Alitalia's slots at Milan Linate Airport (LIN). The Commission said that the new airline should inherit fewer slots from the old air carrier. Adding to that, the EU regulator feared that ITA would be liable for Alitalia’s billions of euros in state aid received in recent years. 

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The European Commission gives green light for €24.7 million state aid for Alitalia as an additional support measure from the government of Italy.
 

The Italian government signed an air transport decree to establish a new airline in October 2020. However, it is not the first time the Italian government is attempting to save Alitalia, which entered the current COVID-19 crisis operating under bankruptcy protection since April 2017. 

In 2008, as the Global Financial Crisis hit the global economy, a “new” Alitalia called Compagnia Aerea Italiana (CAI) was formed, buying out the profitable assets of the old company. In a session in October 2020, members of the European Parliament questioned how ITA would avoid the scenario of 2008 when the debt of the airline “was simply transferred to a ‘bad’ company.”

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Aggressive competition and a troubled start could once again spell trouble for an Italian flag carrier, this time – Italia Trasporto Aereo (ITA).