Brussels (AFP)

Two loans totaling 900 million euros granted in 2017 to Alitalia by the Italian state are "illegal" under EU rules, but the future public company ITA is not liable for repayment, a announced Friday the European Commission.

This investigation that Brussels has just closed does not concern the recent injections of public funds into Italia Trasporto Aereo (ITA), the new airline company supposed to be born from the ashes of Alitalia, in great financial difficulty.

Opened in 2018, the investigations concerned two loans of 600 million and then 300 million euros granted in May and October 2017 to Alitalia.

The company had at the time "an urgent need for liquidity but had lost access to credit because of its deteriorated financial situation", the Commission recalls in a press release.

After "an in-depth investigation", the EU executive said it had come to the conclusion that these two loans gave the company "an unfair advantage over its competitors, in violation of EU rules in State aid matters ".

"Italy must now recover them from Alitalia in order to re-establish a level playing field within the European aviation industry," continued European Competition Commissioner Margrethe Vestager, quoted in the press release.

The public company ITA, founded in 2020 and supposed to take off next month, is therefore not affected by the reimbursement.

Even if it should take over part of Alitalia's assets, ITA is "not its economic successor" and "therefore is not required to repay the illegal state aid received", the Commission said.

After the initial injection of 700 million euros formally approved by the Italian state at the end of July, the ITA company should benefit from two other capital increases in 2022 and 2023, bringing the total to 1.35 billion euros.

Such capital injections from Italy to the tune of 1.35 billion "are in line with market conditions and therefore do not constitute state aid under EU rules", notes the European executive.

The former government led by Giuseppe Conte had planned a total of 3 billion euros of public funds to support the group succeeding Alitalia.

Alitalia's ground services and maintenance will be sold separately, through public tenders, as requested by Brussels, but ITA will be able to participate alongside other investors.

The Alitalia brand will also be put up for sale through a public tender in order to meet EU requirements.

© 2021 AFP