Italy’s coronavirus economic recovery plan includes one major unexpected but understandable surprise: The government is planning to re-nationalize Alitalia, the bankrupt flag carrier which was last owned by the government in 2008.
Since the airline’s 2017 bankruptcy, the airline has kept flying, occasionally profitably, with government-backed bridge loans while trustees have attempted to find a viable buyer. For the past 18 months, a consortium of the Italian state railways (35%), the government (15%) and Delta Airlines (10%) has struggled to find a suitable partner to take the remaining 40%.
That plan, which has struggled through political scandals surrounding one potential partner and lack of interest by others, appears to have suffered a final blow from the COVID-19 crisis, with the airline operating only a few flights at the moment. Under the recovery bill, yesterday was set as the deadline for new offers, after which the government has authority to take over the operation.
While EU policy is generally set against nationalization or significant government support of private companies, it recognizes exceptions for extraordinary circumstances.
