TW741 From Liechtenstein, joined Sep 2004, 477 posts, RR: 0 Posted (8 years 7 months 5 days 3 hours ago) and read 1831 times:
Eight European airlines including British Airways, Germany's Lufthansa and Iberia of Spain, have attacked the planned rescue of Alitalia, the majority state-owned Italian carrier.
The airlines said in a letter to the European Commission that the restructuring of Alitalia appeared to be planned “to violate or circumvent EC state aid rules”.
Further aid to Alitalia would “severely hinder the much-needed consolidation of the European airline industry” and constituted “a major distortion of competition” said the letter, also been signed by Austrian Airlines, SAS Scandinavian Airlines, Finnair, TAP Air Portugal and Hapag-Lloyd Flug, part of the Tui travel group of Germany.
The Commission should be particularly critical of a rescue aimed at giving further aid to an undertaking in a sector that was suffering from overcapacity, the airlines said.
Alitalia was “aggressively expanding capacity” which was “all the more astonishing” for a company that was suffering from severe overcapacity and was asking for rescue aid.
Alitalia had “launched a range of very aggressive business manoeuvres” in recent months with extremely low fares undercutting the cheapest fares offered by other airlines by more than 50 per cent.
The repeated aid to Alitalia the latest rescue is the third since 1997 was merely shifting its problems on to other “more efficient producers”, they said.
Alitalia last week reported a first-half loss of €620m, almost twice its original estimate. The eight airlines point out in the letter to the Commission that the latest guidelines on state aid applicable from this month say “it would not be justified to keep a firm artificially alive in a sector with long-term structural overcapacity” or when it could “only survive as a result of repeated state interventions”.
The European airlines claim the “clear idea” behind the restructuring proposed for Alitalia was to channel €1.6bn ($2bn) of Alitalia's debts into AZ Service the maintenance and ground operations company that is to be separated from AZ Fly, the flight operations company which would indirectly transfer the debt to the state.
Fintecna, an Italian state-controlled holding company, is supposed to take a 49 per cent stake in AZ Service.
This arrangement would constitute additional state aid of at least €800m, said the airlines, and constituted “an infringement of the condition that further state aid (was) prohibited”.
Jamesvf84 From Switzerland, joined Sep 2003, 129 posts, RR: 0 Reply 1, posted (8 years 7 months 5 days 1 hour ago) and read 1649 times:
I can understand their position, but don't you think they want AZ out the way.
With the current state of aircraft industry, the slice that the other airlines would be able to carve out of the Italian sector would help them in these dire times!
BestWestern From Ireland, joined Sep 2000, 6417 posts, RR: 58 Reply 2, posted (8 years 7 months 5 days 1 hour ago) and read 1612 times:
The European airlines claim the “clear idea” behind the restructuring proposed for Alitalia was to channel €1.6bn ($2bn) of Alitalia's debts into AZ Service the maintenance and ground operations company that is to be separated from AZ Fly, the flight operations company which would indirectly transfer the debt to the state.
Fintecna, an Italian state-controlled holding company, is supposed to take a 49 per cent stake in AZ Service.
This arrangement would constitute additional state aid of at least €800m, said the airlines, and constituted “an infringement of the condition that further state aid (was) prohibited”.
That would be like a home owner who cant afford the home loan, splitting the house from the garden - giving the garden the loan, and the giving the garden to their parents... whilst living debt free in the house oblivious to the problems elsewhere, and planning an extension!.... Would your parents allow that for the third time in five years???
Simply astonishing how Alitalia have the nerve to do this, and how the Italian government thinks this above board.
Whilst this goes on Italian aviation will struggle as nobody can compete with a $150 per passenger subsidy to Alitalia from Papa.
Bicoastal From , joined Dec 1969, posts, RR: Reply 3, posted (8 years 7 months 5 days ago) and read 1564 times:
This could be a very cynical move by gutless Italian politicians (gutless and politician are universal, aren't they?). It's a classic case of "good cop, bad cop." The politicians try a scheme that clearly violates the EU rules in order to be good cop to their constituencies. Then the EU can take the heat and be the bad cop when they reject the sham arrangement and force Alitalia to be liquidated. The politicians then say, "we tried, but it was the big bad EU bureaucrats in Brussels that said 'no.'"
Iberia340600 From Spain, joined Oct 2003, 804 posts, RR: 16 Reply 4, posted (8 years 7 months 4 days 21 hours ago) and read 1446 times:
BestWestern:
Great analogy with the house/garden similarity!! I hope the EU takes this claim seriously and takes action or further investigation into Alitalia's reasoning for this loan. It is definitely not fair to the other European carriers.
Scotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3 Reply 5, posted (8 years 7 months 4 days 16 hours ago) and read 1340 times:
Another post accuses BA of shooting itself by not ordering new aircraft...and what does AZ want to do? Why of course, order new aircraft! Where is the reality with this company or, for the matter, the Italian government, which lets this fantasy continue!
Alitalia submits restructuring plan to EC; rivals protest aid
restructuring appears "to violate or circumvent EC state aid rules" and that further aid to Alitalia would "severely hinder the much-needed consolidation of the European airline industry" and constitute "a major distortion of competition."
The eight airlines point out that the latest guidelines on state aid applicable from this month say "it would not be justified to keep a firm artificially alive in a sector with long-term structural overcapacity" or when it could "only survive as a result of repeated state interventions."
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