European Commission Get a Response on Alitalia Financing of 300 million euros

A response has been received by the European Commission from the government of Italy about financing Alitalia 300 million euros. The commission launched an inquiry on June 11th under the European Union aid stipulations, and they said that they didn’t want to comment on the response’s content or the procedure of the investigation until it is completed. They say that they believe the 300 million euro loan may be illegal state aid, as Alitalia has the opportunity to incorporate the loan into their equity capital.

The commission stated, the option of incorporating the loan into the equity capital of the airline is targeted to help the company maintain its capital value in order to avoid filing bankruptcy and to allow the carrier to become privatized. However, they continued, the financed loan may give the airline an invalid advantage over their competitors. They also made note that due to the restructuring and rescue aid that Alitalia has benefited from, the Italian government can’t grant them anymore. The last time the government rescued the airline was in 2001, and under the rules of the European Union, Alitalia is not suppose to get anymore aid until 2011.

The European Commission said that they will do an analysis as to if a private investor would do the same as the government did in the same situation. After the decision has been officially classified under the rules of the European Union during coming days, interested parties will get the opportunity to give initial comments for one month, they added.

Visit www.alitalia.com for more information on this airline.