Alitalia: history of state aid cases with the Commission and respect for the 'one time, last time' principle of the Guidelines (2014/C 249/01) and the market economy principle

Subject: Alitalia: history of state aid cases with the Commission and respect for the 'one time, last time' principle of the Guidelines (2014/C 249/01) and the market economy principle

Since 1996, the Commission has opened seven state aid cases1 regarding Alitalia.2

In 2004 and 20053 4 big money was pumped again into Alitalia with the aim of restructuring and relaunching Italy’s historically and structurally inefficient national carrier. In 2013 Italian Post was asked to rescue Alitalia.5

Point 70 of the Guidelines on restructuring and rescue aid rules6 refers to the ‘one time, last time’ principle, stating:

‘In order to reduce moral hazard, excessive risk-taking incentives and potential competitive distortions, aid should be granted to undertakings in difficulty in respect of only one restructuring operation ... Repeated State interventions are likely to lead to problems of moral hazard and distortions of competition that are contrary to the common interest’.

On 18 December 2018, Commissioner Vestager replied again to press questions regarding Alitalia7 mentioning market economy principles and the competitors in the market.

1. We are aware that each state aid case is a distinct one, but will the Commission take into account all of Alitalia’s heavy state aid history when assessing on the basis of the ‘one time, last time’ principle?

2. Given the failed past promises by the Italian government to restructure and relaunch Alitalia, will Ms Vestager request stricter guarantees in order to evaluate whether there is indeed economic discontinuity with the ‘new Alitalia’, now owned once more by the Italian state also through the state rail company, FS8?

1 http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&case_title=ALITALIA

2 http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&case_title=ALITALIA

3 http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N279_2004

4 http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_C2_2005

5 https://www.ft.com/content/f04fd64a-31c9-11e3-817c-00144feab7de

6 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52014XC0731(01)&from=EN

7 https://ec.europa.eu/avservices/video/player.cfm?ref=I165987

8 https://www.ft.com/content/c9045212-dd38-11e8-9f04-38d397e6661c

Answer given by Ms Vestager on behalf of the European Commission

(12 March 2019)

The Commission stated in its decision to open a formal investigation into the 2017 loan provided to Alitalia (9) that, as there is no economic continuity between Alitalia Linee Aeree SpA, which received restructuring aid in 2008, and Alitalia as it is presently constituted, any past aid that was granted to the former should not be taken into account when assessing the applicability of the ‘one time, last time principle’.

This conclusion follows from the Commission’s 2008 decision (10) establishing the absence of economic continuity between the then ‘old’ and ‘new’ Alitalia in 2008, a decision that the Union Courts upheld (11).

The Commission has therefore reached the preliminary conclusion that, should the loan in question constitute aid, the ‘one time, last time’ principle set out in the Rescue and Restructuring Guidelines would be respected. More generally, the Commission’s investigation is ongoing and its outcome cannot be prejudged at this stage.

The Treaty on the Functioning of the European Union is neutral when it comes to public versus private ownership. When applying the indices used to assess economic discontinuity, as set out in the Commission’s replies to the Honourable Member’s written questions E-002337/2018 and P-005965/2018, the Commission cannot apply those indices in a stricter fashion in respect of public undertakings as compared to private ones.

⋅1∙ http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&case_title=ALITALIA

⋅2∙ http://ec.europa.eu/competition/elojade/isef/index.cfm?fuseaction=dsp_result&case_title=ALITALIA

⋅3∙ http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N279_2004

⋅4∙ http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_C2_2005

⋅5∙ https://www.ft.com/content/f04fd64a-31c9-11e3-817c-00144feab7de

⋅6∙ https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52014XC0731(01)&from=EN

⋅7∙ https://ec.europa.eu/avservices/video/player.cfm?ref=I165987

⋅8∙ https://www.ft.com/content/c9045212-dd38-11e8-9f04-38d397e6661c

⋅9∙ Recital 96 to the letter dated 23 April 2018 addressed to Italy: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48171

⋅10∙ Decision C(2008) 6745 final, of 12 November 2008, concerning state aid N 510/2008 — Italy — Sale of assets of the airline Alitalia.

⋅11∙ Judgment of 28 March 2012, Ryanair v Commission, T-123/09, EU:T:2012:164, upheld on appeal by judgment of 13 June 2013, Ryanair v Commission, C-287/12

P, EU:C:2013:395.