European Commission Approves €40m Aid For Alitalia

Struggling Italian flag carrier Alitalia is set to receive another financial aid package following approval from the European Commission. EU state rules have deemed that such support is appropriate, given the impacts of the ongoing coronavirus pandemic on the SkyTeam member’s network, operations, and finances. Let’s examine the specifics of the deal.

European Commission Approves €40m Aid For Alitalia
Alitalia has suffered heavy losses during the pandemic. Photo: Vincenzo Pace | Simple Flying

A €40 million compensation package

Earlier this week, the European Commission announced that it had approved an Italian aid measure proposed to support the country’s national airline, Alitalia. The carrier is now set to receive a financial support package worth €39.7 million ($47.1 million) as a result. This particular package pertains to losses suffered in March and April this year.

The financial support has been the subject of a fairly quick turnaround. Indeed, the Italian government first notified the Commission of its intentions to compensate its flag carrier with a €39.7 million just last week, on June 25th. The figure is said to be an estimate of the damages suffered by Alitalia this March and April. The Commission explained that:

The restrictions put in place in Italy and other countries to limit the spread of a second and third wave of the coronavirus pandemic have heavily affected Alitalia’s operations. As a result, Alitalia incurred significant operating losses until at least 30 April 2021.”

Alitalia Airbus A330-202 EI-EJM (2) (1)
The Italian government has received approval from the Commission to support its flag carrier with a €39.7 million direct grant. Photo: Vincenzo Pace | Simple Flying

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Not Alitalia’s first financial support deal

Even before the global health crisis brought the airline industry screeching to a halt in 2020, Alitalia had already been plagued with financial difficulties for years. As such, it has needed multiple injections of financial support to help it survive the pandemic.

Before this week’s announcement, its last injection had been approved in May (worth €12.8 million / $15.5 million). Overall, the Commission has now granted five rounds of financial aid for the struggling Italian flag carrier since it first did so in September 2020.

The airline has also been forced to plan extensive restructuring measures as a result of the health crisis. Indeed, Simple Flying reported last December that the restructured Italian flag carrier will have just half the airline’s pre-COVID aircraft and employees.

Alitalia Airbus A330-202 EI-EJL
As well as receiving financial support, Alitalia’s restructuring plans will help keep its finances in check. Photo Vincenzo Pace | Simple Flying

Brighter days ahead?

However, despite Alitalia’s evident difficulties, could brighter days be ahead for the airline now that further financial support has been approved? At present, there are indications of hope that could suggest that the carrier may make something of a summer recovery.

For example, the Italian national airline announced in May that, as part of its summer program, it would be implementing COVID-tested flights on its Rome-Tokyo route. This came about as a result of a successful trial of such services between Rome and New York, and may help to grow passenger numbers and confidence. Elsewhere, its maintenance arm has been keeping busy, and recently completed a C-check on an Air Senegal Airbus A330neo.

What do you make of the European Commission’s decision to grant Alitalia additional aid? have you flown with the Italian flag carrier since the pandemic began? Let us know your thoughts and experiences in the comments.