State aid: Commission opens in-depth investigation into €400 million Italian government loan to Alit
The European Commission has opened an in-depth investigation to assess whether Italy's € 400 million loan granted to Alitalia constitutes State aid and whether it complies with the rules on State aid to companies in difficulty. The opening of an in-depth investigation is a standard step, which provides Italy and other interested parties with an opportunity to provide their views. It does not prejudge in any way the outcome of the investigation.The Commission is working closely with the Italian authorities on the matter.
In late 2019, the Italian authorities announced that they would grant a new loan of €400 million to Alitalia to facilitate the streamlining of the company in order to attempt to sell its assets. The Italian decree-law authorising the loan was approved by the Italian government in December 2019. In January 2020, the decree-law was converted into law by the Italian Parliament. The decree also provides that the procedure enabling the disposal of Alitalia's assets must be carried out by 31 May 2020. A new sales process, carried out by the extraordinary commissioner, is expected to be launched shortly.
In this context, the Commission's in-depth investigation will provide clarity to Italy and the company as well as interested buyer(s), if the €400 million loan constitutes State aid and if it complies with EU State aid rules. The Commission's role under the EU Treaty is to help ensure a level playing field in the EU's Single Market to the benefit of European consumers and businesses. Interested parties may trigger State aid investigations by lodging complaints with the Commission. In this case, the Commission has received a number of complaints, alleging that the loan constitutes State aid that is not compatible with the applicable EU rules.
Background
Alitalia is an Italian airline owned by the consortium Compagnia Aerea Italiana - CAI (51%) and Etihad Airways (49%). The company has been in financial difficulty for a number of years. In May 2017, following the rejection by the company's staff of a cost-cutting plan and the subsequent decision by the shareholders not to provide additional financing, Alitalia was placed under extraordinary administration under Italian bankruptcy law. After the company was placed under extraordinary administration, the Italian authorities decided to sell Alitalia's assets.
In April 2018, the Commission opened an in-depth investigation to assess whether a bridge loan amounting to overall €900 million granted by Italy to Alitalia in 2017 to enable the company to continue its operations constituted State aid and, if so, whether it was in line with EU State aid rules, in particular the Commission's Rescue and Restructuring Aid Guidelines. The Commission's investigation in Italy's €900 million bridge loan is ongoing and separate from today's investigation.
Under EU State aid rules, public interventions in favour of companies can be considered free of State aid when they are made on terms that a private operator would have accepted under market conditions (the market economy operator principle - MEOP). If this principle is not respected, the public interventions involve State aid within the meaning of Article 107 of the Treaty on the Functioning of the European Union, because they confer an economic advantage on the beneficiary that its competitors do not have. The assessment criteria for public interventions in companies in difficulty are set out in the Rescue and Restructuring Aid Guidelines.
The non-confidential version of the decision will be made available under the case number SA.55678 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.