European Commission approves €24.7 million of Italian support to compensate Alitalia for further damages suffered due to coronavirus outbreak
The European Commission has found €24.7 million of Italian support in favour of Alitalia to be in line with EU State aid rules. This measure aims at compensating the airline for the damages suffered on certain routes due to the coronavirus outbreak between 1 November and 31 December 2020.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The coronavirus crisis and restrictions to limit the spread of the virus are continuing for longer than we all hoped for. The measure approved today enables Italy to provide further compensation for direct damages suffered by Alitalia between November and December 2020 as a result of such restrictions. We continue working closely with Member States to ensure that national support measures can be put in place in a coordinated and effective way, in line with EU rules. At the same time, our investigations into past support measures to Alitalia are ongoing and we are in contact with Italy on their plans and compliance with EU rules.”
The restrictions in place both in Italy and in foreign countries in order to limit the spread of a second wave of the pandemic have heavily affected Alitalia’s operations. Italy notified to the Commission an additional aid measure to compensate Alitalia for further damages suffered on certain routes from 1 November 2020 to 31 December 2020 due to the emergency measures necessary to limit the spread of the virus. This follows the Commission decisions of 4 September 2020 and 29 December 2020 to approve Italian measures compensating Alitalia for the damage suffered from governmental restrictions between 1 March 2020 to 15 June 2020 and 16 June to 31 October 2020, respectively.
The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or sectors for damage directly caused by exceptional occurrences. The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having significant economic impact. As a result, exceptional interventions by the Member State to compensate for the damages linked to the outbreak are justified.
The Commission found that the Italian measure will compensate for damages suffered by Alitalia which are directly linked to the coronavirus outbreak, as the loss of profitability on the eligible routes as a result of the containment measures during the relevant period can be considered as damage directly linked to the exceptional occurrence. It also found that the measure is proportionate, as the route-by-route quantitative analysis submitted by Italy appropriately identifies the damage attributable to the containment measures, and therefore the compensation does not exceed what is necessary to make good the damage on those routes.
On this basis, the Commission concluded that the additional Italian damage compensation measure is in line with EU State aid rules.