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September 2022, Virtual
September 29 2022, Virtual
The deal to save Alitalia from bankruptcy has been slammed by the European Low Fares Airline Association (ELFAA) as “totally incomprehensible”.The reaction came after Loyola de Palacio, outgoing EC commissioner for transport, gave the go ahead for the 400m private loan to save the Italian national carrier.Wolfgang Kurth, president of ELFAA and ceo of Hapag-Lloyd Express, a German low cost carrier, said: “This latest newsâ€¦on the Alitalia situation is totally incomprehensible. Although the Commission previously stated that they would not agree to any further support for Alitalia, they are about to agree to yet another bail out for this ailing national carrier.”Mr Kurth said Alitalia being kept “artificially alive” was hampering his members' plans for expansion in Italy.He accused the EC of “blatantly allowing state governments to protect their national airlines while non-state owned airlines are expected to compete in a seriously distorted market.”BA has made similar protests about the plan to save Alitalia which involves splitting the carrier into two companies, AZ Fly for the flying operations and AZ Service for ground operations. The British carrier fears that the re-structuring involving wiping out Alitalia's 1.6bn debt contains a hidden subsidy from the Italian government. ELFAA, which represents airlines which include Ryanair, Air Berlin and Flybe, called on the EC's other commissioners to block Mme de Palacio's action.It warned earlier this year that any aid to Alitalia would be “subject to legal challenge before the European courts.” Talks are still continuing between Alitalia, trade unions and the Italian government over the precise details of the airline's rescue plan although it has been agreed in principle. The deal involves 3,700 redundancies and a reduction in the state's 62% holding in the carrier but how the 1.6bn debt will be handled has not been clarified.