No clear flight plan for Alitalia after rescue stalls

ROME: Efforts to save loss-making Alitalia have reached an impasse after months of unsuccessful negotiations with potential buyers, leaving Italy’s government undecided on the next move. The struggling carrier, which has been under special administration since 2017 and continues to burn through cash, is now at a standstill after a consortium of potential buyers failed to make an offer, and with little hope for one in sight.

“It’s evident that right now a business solution doesn’t exist,” Economy Minister Stefano Patuanelli said this week, addressing a Senate commission. The company “has a dimension that the market has difficulty accepting,” he said. The government has reportedly said it will provide a 400 million euro ($440 million) bridge loan to the struggling company - at the risk of running afoul of European Commission rules on state aid, after the 900 million provided already in 2017.

Patuanelli brushed off such concerns Friday, saying he was “not worried”. The government, he said, was exploring its options, which media reports said include replacing the commissioners running the airline, or outright nationalization. The minister has said placing the beleaguered carrier in the state’s hands “would not necessarily be negative”. Alitalia has been losing money for years, its business squeezed by competition from low-cost carriers, fuel price rises, and luxury airlines from the Middle East.

After months of negotiations and the expiration of the latest deadline for a binding bid, plans for a consortium of investors to save the airline fell through last week after Atlantia said the conditions had not yet been met to participate. Atlantia, a major operator of toll expressways and airports controlled by the Benetton family, operates Rome’s airports and had already twice taken stakes in Alitalia. Others making up the potential partnership were state railway Ferrovie dello Stato (FS), US airline Delta and the Italian treasury.