EU Approves Funds to Italy’s ITA, Lifts Alitalia Burden

The European Union’s competition watchdog on Friday cleared an injection of Italian government funds into new national flag carrier ITA, and said the company would not be held accountable for illegal state aid given to its predecessor Alitalia, the Associated Press reported. Just a month before ITA takes to the skies, the European Commission — which polices anti-trust and competition issues in the 27-nation EU — said capital totaling 1.35 billion euros ($1.6 billion) that Italy intends to grant the new venture is in line with market conditions and cannot be considered as illegal state aid. The commission said ITA will operate less than half of the aircraft now run by Alitalia — which has been in the red for more than a decade — and only parts of its handling and maintenance businesses. ITA will also drop its predecessor’s loss-making routes. At the same time, Brussels ordered the Italian government to recover 900 million euros ($1.01 billion) from Alitalia, saying that a probe concluded that the money constitutes illegal state aid. But it’s unlikely that all the money, which is supposed to come from the sale of company assets, will ever be recovered. Read more.