Alitalia, the predecessor of Italian state-owned airline ITA Airways, will have to repay a €400m loan to the Italian government because the money breached EU state aid rules, EU competition authorities said today.
Italy granted the loan in 2019, two years after giving a €900m loan to keep the loss-making company operating. The carrier never repaid the money.
The European Commission, which acts as the competition watchdog in the 27-country bloc, subsequently ruled that both loans constituted illegal state aid.
"No private investor would have granted the loan to the company at the time and the loan gave Alitalia an unfair economic advantage vis-à-vis its competitors on national, European and world routes," the EU executive said in a statement.
Commission spokeswoman Ariana Podesta said the loan can be registered as a liability under Alitalia's ongoing insolvency proceedings.
"The €400m will be repaid by Alitalia within the limits of the revenues obtained from the sale of the assets of the company and the value of any remaining assets," she told a daily news conference.
The Commission had in 2021 it ordered Alitalia to repay the €900m illegal loan.
Successive governments pumped an estimated €10 billion into Alitalia to keep it afloat in its last 14 years of life, despite heavy losses and bad management.
