Alitalia is running out of cash and Italy can’t help this time

Italy’s bankrupt airline Alitalia is running out of cash just as negotiations with the EU to create a new national carrier are at a standstill. Alitalia, which has been under administration since 2017, paid its 11,000 workers only half their March salaries. The pandemic dealt the final blow to the loss-making airline that for years has been kept afloat by more than E5b of public money. Yet the government’s plan to create a new, smaller carrier from the ashes of Alitalia has run into opposition from the European Union, which demands a clear separation between the assets and personnel of the bankrupt airline and its replacement, called ITA. The EU’s antitrust chief, Margrethe Vestager, insists that the new company pay market rates for Alitalia’s name and its prized takeoff and landing slots at Milan’s Linate airport, according to Italian media. On the line are the E3b Italy is ready to inject into the new company. That money, as well as previous funding, risk being deemed illegal state aid which the ailing Alitalia wouldn’t be able to repay, forcing it to shut down. “A new strategy” is needed “in light of the stalemate in the negotiations with the EU,” Economic Development Minister Giancarlo Giorgetti said on March 30 after meeting Alitalia’s administrators.<br/>