Aviation
Italy to inject another 400 mn euros into airline
Italy to inject another 400 mn euros into airline
The Italian government approved another 400 million euros ($400 million) injection into state-owned ITA Airways on Tuesday, as efforts to sell the airline stalled. After the economy ministry approved the injection, the money will be made accessible to the airline by the end of the month.
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The airline was established last year from the remains of Alitalia, which was shut down after suffering losses of more than 11 billion euros over a decade. While insisting on a new, smaller corporation and restricted public backing, the European Union gave Italy permission to continue supporting an airline.
In August, the previous administration, led by former Italian prime minister Mario Draghi, decided to accept an offer from US investment firm Certares, Delta Air Lines, and Air France-KLM over one from Lufthansa and shipping company MSC.
However, the new Economy Minister Giancarlo Giorgetti did not extend the exclusivity of talks with ITA at the end of October due to the lack of progress in negotiations with the Certares consortium, reopening the door for Lufthansa and shipping company MSC.
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The pick of Certares also dissatisfied the airline’s chairman, Alfredo Altavilla, who resigned on Monday after a disagreement with the board of directors about the appointment. For 350 million euros, the Certares consortium had suggested purchasing 50% of ITA plus one share, leaving the Italian government to own the remaining shares.
Beginning in November, Lufthansa declared that it was “still interested” in acquiring ITA—but only if there was a “true privatization of the airline.” The airline was originally scheduled to get an infusion of 400 million euros in 2022, which follows a 700 million euro investment made in the business last year. Italy has been given permission by the European Commission to invest up to 1.35 billion euros in the airline.
