The European Commission today gave the go-ahead to Alitalia to proceed with a critical restructuring plan, while warning Italy it must act like a private investor in the airline's recapitalisation.
The European Union's executive has been studying the Alitalia plan, which foresees a split-up of the company and a capital increase of up to €1.2 billion to ensure it does not contain elements of illegal state aid.
'On the basis of a thorough and detailed analysis, the Commission has concluded that these recapitalisations do not involve any state aid,' Transport Commissioner Jacques Barrot said in a statement.
'This would have been prohibited by the 'one time, last time' principle which we scrupulously uphold,' it added
Alitalia already enjoyed state aid in 1997, and EU rules prevent that from happening again in what is known as the 'one time, last time' rule.
Today's decision is likely to anger other European airlines, which pressed the Commission to block the proposal.
Under the plan, Alitalia is to be split into AZ Fly and AZ Services, which will handle air and ground operations, respectively. State-owned holding company Fintecna is to take a stake in the spun-off ground service unit.
The Commission said it had determined that a €400m loan it had authorised Italy to guarantee in 2004 had been used properly.
