Italy seeks extension for Alitalia loan period

Italy was working on an extension of as much as six months to a December 15 deadline for Alitalia to repay a à900m loan to keep the airline afloat, while it sought a buyer, a government source said on Saturday.

Once a symbol of Italy’s postwar economic boom, but recently in trouble due to competition from low-cost carriers and high speed trains, Alitalia was put under special administration in 2018 after workers rejected a rescue plan.

As part of the process, Rome has been looking for a buyer, but it has been delayed because of a change of government.

Any extension to the bridge loan period may irk the European Commission, already looking into if this constituted state aid. This may also violate EU guidelines, which allow rescue loans only as a short-term emergency measure. Alitalia declined to comment. Officials within the populist government that came into power in June said Rome would like to put 51% of Alitalia in public hands, possibly via a tie-up with one of Italy’s state-owned giants, flanked by a strong industrial player.

Gianfranco Battisti, the head of Italy’s Ferrovie dello Stato (FS), said in September that Alitalia could be an opportunity for the state-owned railways group, adding he saw synergies in ticketing and routes.

However, Battisti said on Friday that FS was not focused on “financial participations in other companies” at the moment, in comments attributed to him by Italian newspapers on Saturday.

In 2018, EasyJet, Lufthansa, and Wizz Air expressed interest in parts of Alitalia.