The new ITA enters a market dominated by low-cost carriers.
The endless story of Italy and its business in air transport may have another chapter. The European Commission has approved a state investment of 1.35 billion euros (approximately 34 billion crowns) in the new airlines Italia Trasporto Aereo (ITA).
It is to be the successor to the long-term loss-making airline Alitalia. It holds the world record for survival: the carrier has not earned for twenty years, yet has maintained its operations. However, further assistance to the carrier was already illegal, decided by the European Commission.
Although the new airlines are Alitalia’s successor, the European Commission has stated in its decision that there is a clear divide between Alitalia and the new carrier. “Italy has demonstrated that its investment in ITA meets the conditions that a private investor would have accepted,” Margrethe Vestager, Vice-President of the European Commission in charge of compliance with competition rules, said in a statement.
The ITA is scheduled to take off for the first time with passengers on October 15. It enters a market occupied mainly by low-cost players, especially Ryanair, easyJet and Wizz Air, due to Alitalia’s incompetence. “Once the ITA becomes operational, it is up to Italy and the ITA leadership to seize this opportunity once and for all. And we will continue to strive to ensure fair competition in the European aviation sector,“Vestagerová added.
The key news for ITA is that it does not have to pay the € 900 million state loan that Alitalia has received to cover its losses. This was described by the European Commission as illegal support. Given that Alitalia has been insolvent since 2017, it is not clear what Alitalia will repay the loan from. The probable scenario will be that the state will not see a penny of money in Alitalia.
ITA is to start its operation with about half of Alitalia’s aircraft. The Alitalia brand will be sold.
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