Prosecutors launch Alitalia investigation

Alitalia, Italy’s troubled national airline, faces new challenges today, after an announcement on the part of Italian prosecutors that they will look into allegations claiming that tax payers had to foot a massive €5 billion bill in order to save the carrier from looming bankruptcy. These government payments have been going on for the past decade and consumer lobby groups in Italy have, for some time, been highly critical of Italian efforts to save the carrier, using large sums of public money. CODACONS, one of Italy’s largest consumer groups, has lodged a complaint about government subsidies and loans. The organization is especially critical of a recent €300 million emergency loan that authorities provided Alitalia with this past April, in order to spare it from all but certain bankruptcy.

The European Commission (EC) seems to agree with the consumer group in its assessment of the emergency loan, noting that this form of state aid to a national airline was not permitted under European Union rules. The EC also indicated that the loan gave Alitalia an “economic advantage it would not have had under normal market conditions.” British Airways has now also joined the growing chorus of major airlines in condemning the emergency loan.

CODACONS, however, is just as acutely concerned about this loan, as it is about reported payouts to Alitalia executives. Former chairman Maurizio Prato, for example, allegedly received over €326,000 in five months, according to the consumer group’s calculations.

Thank you to AFP for the direct quotes.

www.alitalia.com