New Alitalia Runs Into Headwinds From EU Over Slots

As the ‘new’ Alitalia takes shape and continues its restructuring, the airline is facing a new challenge as the European Commission (EC) is demanding it surrender a large portion of its airport slots. The news, reported on March 26th, comes from a number of sources close to the matter.

New Alitalia Runs Into Headwinds From EU Over Slots
Alitalia’s revival as a new airline will see it become a state-owned entity. Photo: Vincenzo Pace | Simple Flying

Keeping Alitalia alive

The new Alitalia, which is now under the stewardship and control of state-owned company ‘ITA,’ will need to give up a significant number of airport slots, according to sources reporting to Reuters.

This news comes at the same time that the Brussels-based European Commission approved €24.7 million ($29 million) of Italian state aid. This is just several months after the EC also ruled that €73.02 million ($86.46 million) of Italian-government support to Alitalia was in line with EU State aid rules.

New Alitalia Runs Into Headwinds From EU Over Slots
It has been stated in the past that the new airline should be rebranded to distance itself from the past. Photo: Vincenzo Pace | Simple Flying

Brussels vs. Rome

The Italian government thinks that ITA should take over the Alitalia brand as well as its slots. ITA should also acquire part of the assets of the old carrier in order to commence passenger operations with a small fleet before the summer.

The European Commission, on the other hand, is reportedly demanding a significant reduction in the number of slots that the old Alitalia would transfer to ITA. The unidentified source goes on to say that the ITA business plan has yet to be cleared by the EC. This approval is required as the airline is being nationalized and accepting state-aid.

One source told Reuters that the airline’s slots at Milan Linate airport are a problem. Alitalia has operated out of Milan’s two largest airports: The larger and more international-focused Malpensa and the more regional-focused Linate.

New Alitalia Runs Into Headwinds From EU Over Slots
Alitalia has been in financial difficulty for most of its recent history. Photo: Vincenzo Pace | Simple Flying

Up to this point, ITA has rejected suggestions of surrendering slots at Linate. In the past, Alitalia operated more than 50% of total slots at the airport before the global health crisis.

In January, Ryanair, which has operations at Milan Malpensa and Milan Bergamo, has shown interest in acquiring slots at both Milan Linate airport and Rome Fiumicino airports should Alitalia give them up.

German carrier Lufthansa gave up 24 of its own slots last year as a condition to receiving a nine billion euro bailout. The slots were located at its two main hubs at Frankfurt and Munich.

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Action needed quickly

This situation, if not resolved swiftly, could jeopardize the new airline’s summer travel season, especially as vaccination programs continue and economies recover.

Ruetir notes that Italian government ministers overseeing the airline’s nationalization have committed themselves to setting up a solid, sustainable, and independent carrier. Meanwhile, unrest is growing among the airline’s employees:

“We are concerned about salaries that are at risk of not being paid at the expense of 11,000 workers and their families.“– Fabrizio Cuscito, FILT CGIL (Italian Federation of Transport Workers), via Ruetir

Hopefully, a resolution can be reached that will satisfy both sides of the table.

What do you think of the European Commission’s demands for the new Alitalia to give up some of its airport slots? Is this handicapping an already weak airline? Or is it necessary to ensure a level playing field? Let us know in the comments.