MIAMI – The Italian government is on the verge of voting on a US$968m (€800m) financing to get ITA, the airline poised to take over Alitalia (AZ), in the air by July 2021.
According to Italian newspaper Il Corriere, which is, however, specifying that the final amount is yet to be defined, the decision, taken within a Government initiative to restore the Italian economy, would allow the allocation of part of the total US$3.63bn (€3bn) set aside for the revival of the Italian flag carrier, whether under the legacy brand or as a NewCO, namely ITA.
This first allocation would allow the company to show a sufficient financial setup, required by the State controlling agencies, to start underwriting employees, suppliers contracts, and aircraft leases as well as the ticket sales organization.
Fleet Renewal and Current Staff
Il Corriere also reports that ITA CEO Fabio Lazzerini and the NewCo President Francesco Caio, in line with the new industrial plan submitted to the EU Commission, are set to allocate US$1.94bn (€1.6bn) out of the total amount and keep the remaining US$1.69bn (€1.4bn) to be used, along with liquidity coming from credit lines, for future investments and initial fleet renewal.
Within the above-cited decision lies also the destiny of the legacy carrier, set to receive a new state aid of US$121m (€100m) to allow payments of May salaries and to keep the airline afloat. According to the sector workers unions, AZ would have otherwise ceased operations beginning this June if not for the aid. This allocation is yet to be finalized because of the EU Commission’s policy on state aid.
Will the Legacy Brand Continue?
The newspaper continues reports on the contacts between the Italian government with the EU Commission or, better said, the lack thereof, as nothing has happened since the last call made on April 16. The EU Commission on Competition is still waiting for a new proposal from the Italian government to get out of this stalled situation.
One aspect has not changed: EU Commissioner Margrethe Verstager stands firm on the discontinuity between AZ and ITA; basically, this means no brand handover, MilleMiglia frequent flyer program to be abandoned, no handling and maintenance, and handover of 50% of Milano-Linate (LIN) slots.
The ITA/Alitalia dossier is currently present on the desk of Mario Draghi, the Italian Prime Minister, but in these troubled times, the priority seems to be elsewhere.
Featured image: Alitalia Airbus 3230-200 EI-DSW. Photo: Alberto Cucini/Airways