Alitalia was legendary and worldwide the airline was known and famous as the “flag carrier” of Italy. Unfortunately, Alitalia was also rightly famous worldwide as a bankrupt vulture and the airline had never made any money in the last 20 years of its existence and was only kept in the air by partly idiosyncratic constructs.
In October 2021, Alitalia finally ceased flight operations and on October 15, ITA Airways as a new company took over parts of flight operations and is now considered the new airline in Italy. Intensive negotiations are currently being held with Lufthansa regarding a takeover of ITA Airways by Lufthansa.
Meanwhile, the EU is working on Alitalia’s last few months, during which the insolvent airline received millions in loans from Italy. In detail, it is about loans in the amount of 900 million and 400 million euros, which Rome made available to the airline in order to be able to maintain flight operations until the transition to ITA Airways.
However, the EU Commission has now come to the conclusion that these loans were inadmissible and must therefore be reclaimed. They were not used to save Alitalia in the Corona crisis, but rather to ensure that the airline can still continue flight operations, which is illegal and would distort competition.
Italy has now been asked by the EU to reclaim these loans from Alitalia, but it has already been established that ITA Airways cannot be held liable here. This does not endanger the potential takeover by Lufthansa, because the airline would certainly not be taken over if it still had to pay off 1.3 billion euros in debt.
Italy will now reclaim the more than one billion euros from the insolvent Alitalia, including interest. This seems a bit of a formality as the insolvent airline will not be able to raise the funds and you may not have any assets left to sell.
However, in this process it also becomes clear why it was so important that a clearly defined new airline was founded, because you had to get rid of some legacy issues in order to create a viable airline.
However, there is speculation that Lufthansa could revive the Alitalia brand in a few years, because ITA Airways has already bought the trademark rights to Alitalia, so in the future you might see this brand again around the world.
Alitalia loans were illegal | ITA Airways takeover by Lufthansa is not at risk | Frankfurt flyer comment
One could already assume that the last months or even years of Alitalia were not completely clean and it is no coincidence that one felt it necessary to make a very clear cut in Italy. Therefore, the new airline also has a completely different name, which certainly surprised one or the other, because actually the last remaining value of Alitalia was the brand itself.
However, this will not have any impact on the Lufthansa takeover and I am very curious to see how things will continue here, but you can expect to hear more details here in the coming weeks.
