A direct government grant of almost E200m to Alitalia has been approved by the EC to compensate the airline for damage caused by the Covid-19 pandemic. Competition regulators approved the E199.5m direct grant, which relates to the impact on Alitalia’s business of coronavirus containment measures and travel restrictions between 1 March and 15 June, under the Treaty on the Functioning of the European Union. The treaty allows for state aid to be granted to compensate specific companies or sectors for damage caused by exceptional occurrences. “Since the start of the coronavirus outbreak, Alitalia has suffered a significant reduction of its services, resulting in high operating losses,” says the Commission in a Friday statement. Regulators concluded that the Alitalia grant is in line with EU state-aid rules because it is “proportionate” and “does not exceed what is necessary to make good the damage”.<br/>