Italian government reserves additional funds for aviation industry - report

Airline Industry Information, Oct 11, 2004

AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD

The Italian government's reported inclusion of EUR750m in its latest budget for "capital for companies in the air transport sector" has led to speculation that the national carrier may receive another state handout.

Alitalia has recently been granted access to a EUR400m loan guaranteed by the Italian government and approved by the European Union to undergo a radical restructure that could see the airline split into two divisions, one dealing with flight operations and the other with services, called AZ Fly and AZ Service respectively.

The new EUR750m budget allowance for aviation companies could mean that the airline receives far more than the EUR400m approved by the EU. No one from the Italian government yet commented on the purpose of this budget fund.

Alitalia is meant to be totally privatised by the end of 2005 under the EUR400m loan deal, reports Air & Business Travel News.

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