Alitalia’s €3 billion cash injection ‘not another rescue’

Alitalia has secured a €3 billion cash injection from the Italian government, with Italy's Industry Minister defending the decision to save the national carrier once again from collapse.

Alitalia Airbus A330 registered EI-EJM. Photo by Matt Lino | AeroNewsX

This new three billion euro cash injection is in addition to the €600 million the carrier received from the government in mid-March. Back in March, AeroNewsX first reported that the Italian flag carrier was to be nationalised, as the airline struggled with the COVID-19 pandemic and the suspension of air travel across Europe. The nationalisation of Alitalia was confirmed at the end of April, and the airline would be placed into a newco with a fleet of over 90 aircraft. The government was also successful in negotiating with lessors to have lease repayments paid per flight hour performed until March 2021, and have also signed a cheaper 3-year maintenance contract. The announcement of a three billion euro funding package comes following the news that the airline reached an agreement with trade unions to grant a leave of absence for over 6,600 employees until the end of October 2020. Industry Minister Stefano Patuanelli told the Italian Senate that "this is not another rescue, but this is the company's relaunch”.This was in an attempt to defend the government's decision of injecting liquidity into the struggling company, that had already received funding in March and December of last year. The Italian government is still assessing potential candidates to run the state-controlled carrier. Italian newspaper, Il Sole 24 Ore, reported that former Fiat Chrysler Automobiles executive, Alfredo Altavilla is the lead candidate to run the new nationalised carrier. However, no decision has been confirmed. The Italian government is also considering potentially forming a new partnership, as the airline was recently removed from the SkyTeam transatlantic joint venture. Last month, European Commissioner for Competition, Margrethe Vestager, said her stance remained “neutral” on Italy's plans to nationalize Alitalia. However, there is still an ongoing EU investigation into a €400 million public loan to Alitalia that was granted to the struggling airline by the Italian government back in December of last year. The investigation was launched after complaints alleged the loan was not compatible with EU State aid rules. The European Commission has not confirmed whether it will be investigating this cash injection or the one in March, as the airline is now officially owned by the Italian government.