Low Cost Airlines Declares War to Alitalia

Article published on Jan. 9, 2009
Article published on Jan. 9, 2009
So...this is the text I got into my email: what do you think about that? Did Alitalia deserve the special treatment it had or, as we get closer to the EU Elections, people should show their concern about such measures?

"The European Low Fares Airline Association (ELFAA) today

submitted a formal complaint to the European Commission against unlawful state aid to

Alitalia and its successor Compagnia Aerea Italiana S.p.A. (CAI).

CAI / Alitalia will benefit from state aid in the region of €100 million per annum over a

seven-year period thanks to the ‘Save Alitalia Decree’. In this highly controversial law, the

Italian Government imposed an airport tax of €3 per passenger from 28 October 2008.

This tax not only ensures a constant flow of unlawful aid to CAI / Alitalia, but also offloads

the cost of the subsidies onto CAI’s competitors.

John Hanlon, Secretary General of ELFAA, said

“ELFAA members are extremely concerned about the precedent this subsidy sets.

This time not only the taxpayer but also the competition pays.”

“Nothing less than the credibility of the European Commission is at stake. If the EU

allows Member States to tax foreign companies to finance an ailing national

champion, the Single European Market is sacrificed at the altar of economic


“Even before the European Commission ruled in November that Alitalia has to pay

back 300 million of state aid, the serial basket case of European aviation got the

promise of another mind-boggling cash injection. ELFAA is today calling on the

European Commission to put an end to this scandalous state aid and to overturn

the ‘Save Alitalia Decree’ and the €3 tax.”

The tax will raise approximately €210m per year by levying €3 on each of the 70 million

passengers departing from Italian airports annually. ELFAA will account for approximately

15 million departing passengers at Italian airports in 2009, thus incurring a cost of €45m.

ELFAA’s conservative estimate is that CAI / Alitalia will benefit from roughly €100 million

per annum on average in State aid, through changes to the social security system

introduced in “decreto Salvalitalia” (the Save Alitalia Decree – Decree 134/2008) of 28

August 2008.

This unlawful aid takes form of: i) financing Alitalia’s obligation to provide redundancy

benefits; and ii) lowering social security costs for CAI when it employs former Alitalia

employees. This aid will further distort the competitive situation in the EU air transport

market by allowing Alitalia / CAI to benefit from unfair subsidies to the detriment of all other

airlines active in this market