fasteddie1971

https://www.ilsole24ore.com/art/fina...?uuid=AEMuBZLG
(in Italian)

Ahead of meeting the unions today, Di Maio has stated that:
- a newco will be created, and the plan is for it to have €2bn (for AZ to burn its merry way through!)
- €900m bridging loan granted by the previous govt will be repaid by the 10 December repayment deadline
- part of this loan will be converted into equity giving the state a 15% stake in the newco
- a partnership will be created with FS (state railways) and possibly other state-owned enterprise
- he expects there to be a binding offer for Alitalia received by the 31 October deadline

AlicorporateUK

Sadly true, even though, as someone who barely knows about Italian politics yet occasionally reads about it through the usual channels (or indeed hear people's conversations whilst in Italy), I would have expected the new government (at least on the basis of what they had been heralding during the last pre-election's campaign i.e. along the lines of let's get rid of the 'old system' and all the 'waste' bla-bla-bla) to get rid of it [Alitalia] once for all in terms of somewhat facilitating investments from other sources (Lufthansa was apparently amongst the few serious contenders, this also according to its CEO) and therefore making sure to ease the pressure for the average Mr & Mrs Bianchi in terms of tax contribution to the former flag carrier. Ah well, never-mind.

G

Sciamano

The story is very simple and there can be only two scenarios:

1) AZ will be bought by a company with NO relation with Italy (like LH) = maybe (unions is the problem) its future can be different and losses won't be paid by Italians
2) AZ will be bought/saved/restructured (whatever you want to call it) by any company related to Italy = maybe AZ will have profits (I doubt it on the long term) but in case of losses surely those will be paid by Italians

ringingup

Alitalia was explicitly mentioned in the "government contract" document between the 5 star movement and the league.

Which translates into: When it comes to Alitalia, we are convinced that rescuing it simply in a context of financial survival is not enough, but that it will need to be relaunched in the context of a strategic, national, transport plan, of which a competitive national airline is an essential part.

Dav77

BobFF68

With the conversion of loan into equity means that the loan won't be repaid totally, the remaining 15-20% converted into stake (if EU will ever allow this operation) will be then at direct cost of Country treasure, thus tax payers.
FS even as a private entity now, is still 100% controlled by state and around 50% of its revenues are coming from government transfers.

This just to say that thinking this eventual plan not to be financed by citizen/tax payers money is simply a mere dream.

AlicorporateUK

Indeed. Putting the state-owned's train operator into the mix is just [yet another] political move aimed at keeping afloat not the carrier itself but the hefty political connections around it, at the expense, needless to say, of the tax-payer.

G

Worcester

How does any of this comply with EU state aid laws?

AlicorporateUK

A few years back when Poste Italiane pumped some large sums for an unspecified 'cooperation' with the former flag carrier (which, needless to say, was a bailout), the EU looked into the matter but I don't seem to remember them taking any action. This time around, considering also the not-so idyllic relations between the EU and the new Italian government, one would assume that they (i.e. the EU) would do anything in their power to halt any public funds reaching the struggling airline. We are, however, at anybody's guess territory.

G

Dav77

Dav77

BobFF68

Just because the investment will be taken from the government transfers in any case, either the government is going to increase directly their budget to FS, or FS to cut his budget in their own core business (rail), the community once more will have to bear the cost of this investment either directly or indirectly, after already wasting 8 billion Euro in the sinkhole named Alitalia for the past 15 years. Maybe somebody still happy about paying again, I think many of the Italian tax payers me including aren't anymore.

Then the tale of the "strategic role of Alitalia for the country tourism" is just the excuse used every time ta ask for money, Alitalia now covering just less than 15% of air traffic in Italy, Spain does not have anymore a "national" carrier, Iberia is just a private company in which government does not have any stake and Spain is just able attract much more tourists than Italy.

NickB

It makes no difference whether the investment is from the government itself or from another public entity/state-owned enterprise. It can still potentially be regarded as state aid. The key question is whether a private investor in a comparable situation would invest or not. If the answer is yes, then there is no issue as far as EU law is concerned. If not, it has the potential to be unlawful state aid which may need eventually to be repaid.

Dav77

rma1999

How many times has AZ gone broke?? 3-4?? Di Maio has not learned the lesson!! More good money going to follow bad money......