EU confirms full investigation into Alitalia's government loan

Airline Industry Information,  June 12, 2008  

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AIRLINE INDUSTRY INFORMATION-(C)1997-2008 M2 COMMUNICATIONS LTD

The European Commission has said that it will carry out an in-depth investigation into the EUR300m loan granted to national carrier Alitalia by the Italian government.

The investigation will give all interested parties the opportunity to submit comments and will conclude with a decision on whether the loan is compatible with European Union rules on state aid.

The Italian authorities granted a loan of EUR300m to Alitalia in April 2008 and the following month the company was permitted to incorporate the funds into its equity capital.

The aim was to help the company avoid bankruptcy proceedings and allow its possible privatisation. However, the Commission considers that this measure could constitute state aid which is incompatible with EU rules, giving the company an unjustified advantage over its competitors.

During its investigation the Commission will assess whether a private investor would have acted in the same way as the Italian government.

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