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Italy, Brussels to hammer out Alitalia revamp details next week

Giuseppe Fonte and Francesca Landini
·2-min read
FILE PHOTO: An Alitalia Airbus A320 passenger aircraft takes off at Fiumicino International Airport in Rome

By Giuseppe Fonte and Francesca Landini

ROME (Reuters) - Rome and Brussels will start talks next week to iron out technical details for the revamp of ailing carrier Alitalia, three Italian ministers said after what they referred to as a "positive and constructive" first meeting between the two sides on Friday.

The new Italian government held a video call with European Union Commissioner Margrethe Vestager over Rome's plan to nationalise Alitalia, the three ministers, who were involved in the call, said. They said they had agreed with Brussels that it was necessary to ensure economic discontinuity between the old airline and a proposed new carrier.

Italy has earmarked 3 billion euros ($3.6 billion) to launch a new state-owned airline, dubbed ITA, to replace Alitalia, which has been run by state-appointed administrators since it was declared bankrupt in 2017.

Rome and Brussels will start discussions next week over "possible solutions to ensure that the new air carrier is created as soon as possible in accordance with the procedures of national and European law," Italy's economy, transport and industry ministers said in a joint statement on Friday.

A state-supported flag carrier needs the green light from the European Commission, which has asked for an open tender of Alitalia assets and is pressing for the new airline to forsake the old brand and some of its airport slots.

Alitalia's administrator complained last month that it would take four to five months to organise an open tender, during which the company would accrue more losses, with the launch of its replacement pushed back to mid-summer.

To unblock the project, Rome could kick-start a process for the direct sale of Alitalia's aviation business to ITA in the short term, one industry source told Reuters, adding maintenance and handling divisions would be put on sale with an open tender in a second step.

Separately, USAerospace Partners Chairwoman Michele Roosevelt Edwards said she had asked for a meeting with the Italian government over Alitalia and added the American aviation service group was ready to invest $1.5 billion in the carrier.

USAerospace said a partnership with ITA and the Italian government could have more chances of success than the launch of a "small company with no critical mass".

($1 = 0.8379 euros)

(Reporting by Giuseppe Fonte and Francesca Landini, editing by Kirsten Donovan and Emelia Sithole-Matarise)