In accordance with the European State aid rules as well as the temporary framework to support the economy and to ensure businesses sufficient liquidity to preserve the continuity of their economic activity during the coronavirus outbreak, on 29 December 2020 the Commission approved the almost €73 million supplied by the Italian government in the form of a direct grant to compensate Alitalia for the damages suffered due to the pandemic between 16 June and 31 October 2020.

The measure follows the almost €199 million Italy already granted the airline to compensate the damages suffered from 1 March to 15 June 2020, approved by the Commission on 4 September 2020, and represents a further effort from the government to cope with the financial difficulty Alitalia has been in for a number of years. In 2017, indeed, Italy granted a 900 million bridge loan, joined in 2019 by further 400 million (both the aids are still under investigation by the Commission).

Being an extraordinary, unforeseeable event having significant economic impact, the coronavirus outbreak qualifies as such an exceptional occurrence under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU). Therefore, since the loss of profitability as a result of the containment measures introduced during the relevant period can be considered as damage directly linked to such an exceptional occurrence, according to the Commission the additional Italian damage compensation measure is in line with the European State aid rules. Such a measure, furthermore, is proportionate inasmuch as the compensation does not exceed what is necessary to make good the damage suffered by Alitalia, identified by the government through a route-by-route quantitative analysis. 

Marco Stillo