Airline Code [AZA]
View More Alitalia News
Tags :Continental Europe, Alitalia
In a court document, it annulled Alitalia's challenge to the decision, saying it failed to demonstrate the existence of either procedural defects or substantive errors in the criteria and conditions for granting the aid.
In 1996, Alitalia adopted a restructuring plan for 1996-2000. A capital injection of 2,750 billion lira was to be paid by majority shareholder Istituto per la Ricostruzione Industriale in three instalments.
The commission adopted a decision declaring the state aid compatible with the common market, subject to the requirement that the Italian authorities fulfilled ten conditions.
Following an action brought by Alitalia, the CFI annulled the 1997 decision because it failed to state reasons and had made errors in its assessment.
The commission then adopted a new decision in 2001 to rectify these mistakes. It again said the aid was legal but attached more conditions to it.
Alitalia then challenged that decision with the CFI.
The court confirmed the validity of the conditions imposed on Alitalia.
On 11-Jun, the commission launched a separate investigation under EU aid rules into a 300 million euro loan granted by the Italian government to Alitalia.
On 22-Apri, Italian authorities granted the loan. On 27-May, they allowed Alitalia to incorporate that sum into its equity capital, the commission said then.
This option is intended to enable the company to maintain the value of its capital so as to avoid bankruptcy proceedings and allow its possible privatisation, the commission added.
However, it said the financing could give the company an "unjustified advantage" over its competitors.
It noted that as Alitalia has already benefited from rescue and restructuring aid, Italy cannot, in principle, grant it any more. The Italian government last came to the rescue of the carrier in 2001. Under EU rules, Alitalia is not allowed such aid again until 2011.
The commission Wednesday said there is "no direct connection" between the 2001 decision and its current probe.
Date posted: 10-Jul-08
|
EU Court upholds Commission decision in 2001 on aid for Alitalia 
