2009/155/EC: Commission Decision of 12 November 2008 on the loan of EUR 300 million granted by Italy to Alitalia No C 26/08 (ex NN 31/08) (notified under document number C(2008) 6743) (Text with EEA relevance)
Date: 2008-11-12
Institutions: European Commission
Subjects: Italy, State aid, air transport, competition law, control of State aid, transport company

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(Acts adopted under the EC Treaty/Euratom Treaty whose publication is not obligatory)

II

DECISIONS

COMMISSION

COMMISSION DECISION

of 12 November 2008

on the loan of EUR 300 million granted by Italy to Alitalia No C 26/08 (ex NN 31/08)

(notified under document number C(2008) 6743)

(Only the Italian text is authentic)

(Text with EEA relevance)

(2009/155/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,
and in particular
Article 88(2) thereof,

establishing the European
subparagraph of
the

first

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1) and having regard to
their comments,

Whereas:

1. PROCEDURE

(1)

At a meeting on 23 April 2008 the Italian authorities
the Italian Council of
informed the Commission that
Ministers had approved, on 22 April 2008,
the
granting of a loan of EUR 300 million to Alitalia
through Decree-Law No 80 of 23 April 2008 (2).

(2)

Since it had not received notification from the Italian
authorities prior to the decision to grant this loan, by

letter of 24 April 2008 (D/422119) the Commission
asked them to confirm the existence of this loan, to
provide any relevant information allowing an assessment
of the measure in respect of Articles 87 and 88 of the
Treaty, to suspend granting of the loan and to inform the
Commission of the measures taken to comply with this
obligation in accordance with Article 88(2) of the Treaty.

In that letter, the Commission also reminded the Italian
authorities of the requirement on them to notify all plans
to grant or alter aid and not to implement any planned
measure before a final decision has been reached in the
Commission’s investigation procedure.

By letter of 7 May 2008 the Italian authorities asked for
an extension to the deadline which they had been given
to reply to the Commission’s letter of 24 April 2008.
The Commission granted this request by letter of 8 May
2008 (D/423186), asking the Italian authorities to reply
by 30 May 2008.

By letter of 30 May 2008 the Italian authorities replied
to the Commission’s letter of 24 April 2008.
In this
letter, the Italian authorities informed the Commission,
among other things, of the adoption, on 27 May 2008,
of Decree-Law No 93 (3), giving Alitalia the option of
counting the value of the aforementioned loan as part
of its capital.

(3)

(4)

(5)

(1) OJ C 184, 22.7.2008, p. 34.
(2) Decreto-legge no 80, Misure urgenti per assicurare il pubblico
servizio di trasporto aereo (Official Gazette of the Italian Republic No
97, 24.4.2008).

(3) Decreto-legge no 93, Misure urgenti per assicurare il pubblico
servizio di trasporto aereo (Official Gazette of the Italian Republic No
127, 28.5.2008).

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(6)

(7)

(8)

the same time,

the Commission received several
At
complaints,
including from various airlines, regarding
the granting of the EUR 300 million loan by the Italian
Government to Alitalia.

By letter of 12 June 2008 (D/203822) the Commission
notified the Italian authorities of its decision of 11 June
investigation procedure
2008 to initiate the formal
pursuant
In this
the EC Treaty.
to Article 88(2) of
decision, the Commission asked Italy and other interested
parties to submit their comments within a certain time
limit. The decision was published in the Official Journal of
the European Union (4).

By letter of 12 July 2008 (A/509783) the Italian au­
thorities sent their comments to the Commission. The
Commission also received comments from five interested
parties. These were sent to the Italian authorities by letter
of 3 September 2008 (D/433031). A list of
these
interested parties is annexed to this Decision.

(9)

The Italian authorities have not commented on the
comments from the interested parties.

2. DESCRIPTION OF THE MEASURE

(10) At the meeting on 23 April 2008 the Italian authorities
aforementioned
submitted to the Commission the
Decree-Law No 80, granting a loan of EUR 300 million
from the Italian State to Alitalia, a company in which it
held a 49,9 % stake.

(11)

The recitals to that Decree-Law state the following:

(12)

(13)

transport

Given the extraordinary need and urgency to guarantee,
for purposes of public order and territorial continuity,
the aforementioned public air
service by
granting Alitalia […] a short-term loan from the State,
at market conditions, for the duration strictly needed to
avoid compromising operational continuity until the new
Government takes office, thus enabling it to take, with its
full powers, the initiatives chosen to make possible the
recovery of the company and completion of its liberal­
isation process.’

this Decree-Law authorises

to an interest rate equivalent

In order to enable it to meet its immediate liquidity
needs, Article 1 of
the
granting to Alitalia of a loan of EUR 300 million,
which must be repaid as quickly as possible between
its share capital and
the 30th day after transfer of
the
31 December 2008. This Article also states that
to the
loan is subject
reference rates adopted by the Commission and,
in
particular, up to 30 June 2008, the rate indicated in
the Commission notice on current State aid recovery
interest
for 25
and reference/discount
Member States applicable as from 1 January 2008 (5)
and, with effect from 1 July 2008, the rate indicated in
the Communication from the Commission on the
revision of
the method for setting the reference and
discount rates (6).

rates

rates

its capital,

By letter of 30 May 2008 the Italian authorities informed
the Commission that, by means of the aforementioned
Decree-Law No 93, the Italian Government had given
Alitalia the option of counting the value of the loan as
in order to cover its losses (see
part of
Article 4(3) of
the aforementioned Decree-Law). The
intention behind this was to allow the company to
in order to ensure
maintain the value of
share capital and
that
reserves fall below the legal
thereby preventing
(procedura concorsuale), and to
insolvency proceedings
ensure that
the possibility of privatisation remained
open and credible.

its capital,
losses did not make its
limit,

its

‘Having regard to the financial situation of Alitalia […],
as demonstrated by the information disclosed to the
market, and its role as the carrier which provides the
largest share of the public air transport service between
the national territory and countries not belonging to the
European Union, and the onward connections on these
routes for passenger and cargo traffic from and to
regional catchment areas;

(14)

The loan repayment terms laid down in Decree-Law No
80 remain applicable in the context of Decree-Law No
93, except for the fact that the interest rate to which the
loan is subject has been increased by 1 % (see Article 4(1)
and (2) of Decree-Law No 93) and that, in the event of
the company being liquidated, the amount in question
will be repaid only after all the other creditors have been
paid off,
jointly and in proportion to the share capital
(see Article 4(4) of Decree-Law No 93).

(4) OJ C 184, 22.7.2008, p. 34.

(5) OJ C 319, 29.12.2007, p. 6.
(6) OJ C 14, 19.1.2008, p. 6.

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3. GROUNDS FOR INITIATING THE FORMAL
INVESTIGATION PROCEDURE

(21)

(15)

In its Decision of 11 June 2008, the Commission found
that the measure in question (hereinafter referred to as
the measure) was a loan granted by the Italian State, the
value of which could be counted as part of Alitalia’s
capital (7).

They considered that the Italian State had acted as a
shareholder whose objective was
to ensure that a
company in which it held a stake had the financial
resources necessary to meet its liquidity needs in the
short term. The ordinary shareholder loan granted by
Italy thus constituted a simple bridging loan intended
to protect the value of the State’s holding and would
have been granted by any prudent shareholder pursuing
a structural policy — whether general or sectoral —
guided by longer-term prospects of profitability on the
invested than those of an ordinary investor. In
capital
this context,
the interest rates applied in the case in
point were consistent with the nature and objectives of
a shareholder loan. Although such financing is often not
in the case in point it was considered to be
onerous,
onerous, taking into account the nature of the lender
and the setting of the interest rate at a level allowing a
direct and appropriate return on the capital.

a

the

that

time

same

(22) With regard to the Commission’s claim that the doubts
concerning the aid nature of the measure in question
were substantiated by the fact that it was adopted at
the
takeover bid
as withdrawal of
submitted to Alitalia on 14 March 2008 and by the
‘certain and immediate
fact
existence of
another
prospects of Alitalia being purchased by
investor’ was not proven,
the
that
Italy pointed out
reasons preventing
the privatisation process being
finalised with the Air France-KLM group had already
been made clear. According to the Italian authorities,
however,
this process did not
undermine the prospect of privatisation in a context
making best use of the company’s assets, while safe­
guarding its residual value for shareholders.

the non-completion of

(23) Moreover, developments after 30 May 2008 suggested
In
that this course could still reasonably be followed.
this context,
referred to the
the Italian authorities
contract concluded on 9 and 10 June 2008 with
which Alitalia charged Intesa Sanpaolo SpA (hereinafter
referred to as Intesa Sanpaolo) with seeking out a bid to
the Ministry of Economic Affairs and Finance, as share­
holder in Alitalia, and to Alitalia, with the aim that one
investors interested in
or more industrial or financial
participating
and
in
relaunching of Alitalia, particularly through its capitali­
sation, would take lasting control of the company. This
mandate had a duration of 60 days and could be
extended by 30 days at the company’s request.

development

recovery,

the

(16) On the subject of whether the measure in question could
be regarded as aid, the Commission expressed its doubts
in granting Alitalia the
as to whether the Italian State,
measure, acted as a prudent shareholder pursuing a
structural policy — whether general or
sectoral —
guided by longer-term prospects of profitability on the
capital invested than those of an ordinary investor.

(17)

(18)

In this context, the Commission took the view, on the
basis of the information at its disposal, that, irrespective
of how the relevant funds were used, the measure in
question provided Alitalia with an economic advantage
it would not have had under normal market conditions.
This assessment was based on the company’s financial
situation and on the conditions and circumstances
under which the measure was granted.

The Commission also expressed doubts as to whether the
measure was compatible with the common market. On
the basis of the information at its disposal at that stage
of the procedure, it took the view that the measure could
not be declared compatible with the common market in
accordance with the Community guidelines on State aid
for rescuing and restructuring firms in difficulty (here­
inafter referred to as the 2004 guidelines) (8). It pointed
out that Alitalia had already received rescue and restruc­
turing aid.

investigation procedure in order

the Commission decided to initiate the
(19) Accordingly,
to allay its
formal
doubts both as to whether
the scheme in question
constituted State aid and as to its compatibility with
the common market.

4. COMMENTS BY THE ITALIAN AUTHORITIES

(20)

In their comments, the Italian authorities asserted that
the measure in question did not constitute State aid
within the meaning of Article 87(1) of the Treaty.

(7) The measure covered by this Decision is based on the aforemen­

tioned Decree-Laws Nos 80 and 93.

(8) OJ C 244, 1.10.2004, p. 2.

(24)

In the alternative, the Italian authorities asserted that, in
any event,
compatible with the
common market in accordance with the 2004 guidelines.

the measure was

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(25)

(26)

(27)

(28)

Firstly, Alitalia was a firm in difficulty within the
meaning of those guidelines. Secondly, the measure in
question was reversible and thus complied with the
requirement of the 2004 guidelines according to which
involve purely temporary forms of
rescue aid must
support and must not constitute structural measures.

(29)

Sixthly, and lastly, application of the ‘one time, last time’
principle referred to in paragraph 25(e) of
the 2004
guidelines was not contrary to the specific circumstances
of the case in point.

the process of privatisation of

Thirdly,
the company,
together with the measure in question, which was
adopted to allow completion of this process, complied
the 2004
with the requirements of point 25(b) of
guidelines. The EUR 300 million loan simply guaranteed
the survival of
to
implement competitive strategies on the air transport
market likely to lead to hypothetical economic conse­
quences.

the company, without allowing it

the

the

2004

Italian

guidelines),

In this context,
that,

Fourthly, with regard to the Commission’s assertion that
the State had not given an undertaking to communicate,
not later than six months after the measure has been
implemented, a restructuring plan (9)
(paragraph 25(c)
authorities
of
countered that drafting the plan was part of
the
process of privatising the company, which Italy had
discussed in detail in its letter of 30 May 2008 to the
the Italian authorities
Commission.
pointed out
full
repayment of the loan, Decree-Law No 93 laid down
that repayment must occur strictly as soon as possible
between the 30th day following the date of transfer by
the Ministry of Economic Affairs and Finance of its full
shareholding, i.e. the date of loss of effective control, and
31 December 2008. They inferred from this that a
timetable was indeed submitted at
the same time as
adoption of the disputed measure and that it substantially
satisfied the requirements of the 2004 guidelines in this
connection.

alternative

case of

in the

In this connection,

Fifthly, in accordance with the requirements of paragraph
25(d) of the 2004 guidelines, granting of the loan in
the company’s
question was necessary by virtue of
immediate liquidity need caused by objective economic
difficulties, which were recognised by the Commission in
its Decision of 11 June 2008 (see recitals 18 to 20 of the
Decision).
the Italian authorities
pointed out that the loan simply aimed to safeguard, in
the short term, the survival and assets of Alitalia, in order
to allow the privatisation process to succeed. The total
amount of EUR 300 million was strictly necessary and
to achieving these objectives, as demon­
proportional
company’s
Italy’s presentation of
strated
by
economic and financial situation in its letter of 30 May
2008 to the Commission (see pages 6 to 9).

the

(30) Although Alitalia had already received restructuring aid
linked to the recovery plan over the 1996-2000 period,
and rescue aid in 2004, it could be exempted from the
‘one time,
time’ principle. The Italian authorities
referred,
in this context, to the Commission Decision
of 1 December 2004 concerning the State aid which
France was planning to implement for Bull (10)
(here­
inafter the Bull Decision).

last

(31)

(32)

the status quo, postpone[d]

They pointed out that application of the ‘one time, last
time’ principle was aimed at avoiding a situation whereby
repeated public intervention in favour of certain firms
simply ‘maintain[ed]
the
inevitable and in the meantime shift[ed] economic and
social problems on to other, more efficient producers or
other Member States’
the 2004
guidelines). The possibility of waiving this principle was
dependent on recognition of the existence of cases where
these factors were not verifiable and the cumulation of
aid granted over a given period to a single beneficiary
was not sufficient to consider that the firm ‘[could] only
survive thanks to repeated state support’ (paragraph 72
of the guidelines).

(paragraph 72 of

situation concerning

In this connection, privatisation of the company, which
remained a possible and credible outcome, could lead,
when achieved, to a real change as compared to the
the management of
existing
Alitalia, which would be subject
to new supervisory
bodies, and allow the company to return to profitability
through the economic contributions of the shareholders
of the new company. The Italian authorities also pointed
out that all the external and unforeseen factors which,
taken together, had prolonged the privatisation process
of Alitalia could undoubtedly be considered exceptional
and unforeseen circumstances for which it was not
the
responsible,
2004 guidelines.

in accordance with paragraph 73 of

5. COMMENTS BY INTERESTED THIRD PARTIES

(33)

Five interested parties submitted their comments to the
Commission under Article 88(2) of the Treaty. A list of
these interested parties is annexed to this Decision.

(34) With regard to whether

the measure

in question
interested parties supported the
four
constituted aid,
Commission’s position, believing that
this measure
constituted aid within the meaning of Article 87(1) of
the Treaty.

(9) Commission Decision of 11 June 2008, previously cited, recital 7.

(10) OJ L 342, 24.12.2005, p. 81.

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(35)

British Airways (BA) and Sterling Airlines asserted that,
without
the measure in question, Alitalia would go
bankrupt under Italian law. Alitalia would thus lose its
air operator’s certificate in accordance with the civil
in consequence, would have
aviation regulations and,
to cease operations.

in question for

(36) Neos pointed out, as regards the interest rate applicable
the purposes of
to the measure
repayment,
the 100 basis points added to the
that
reference rate by no means reflected the risks incurred
by the Italian authorities in granting the measure. Neos
also supported the Commission’s assessment
in its
Decision of 11 June 2008 concerning the lack of
prospects
the privatisation of Alitalia when the
measure in question was granted. Indeed, this circum­
stance would later be confirmed by the serious tensions
during August between the Italian Ministry of Finance
and the company’s management board concerning the
‘continuity of
its
half-yearly accounts.

the company’ and the approval of

for

(37)

that

BA and Sterling Airlines
recalled that Alitalia had
benefited from similar measures in the past. Meanwhile,
the Commission had
Ryanair expressed regret
limited the scope of the formal investigation procedure
initiated on 11 June 2008 to the measure in question,
since, in its view, Alitalia had benefited from other illegal
State aid measures since November 2005. Analysing
these other measures would have reinforced the view
that,
a private
investor would not have agreed to grant the relevant
measure.

circumstances

in question,

in the

that

made clear that the very difficult situation facing the air
sector and linked, in particular, to the increased oil price,
affected all the participants in the sector. BA inferred
from this
this argument could not be validly
invoked by Alitalia as reason to derogate from the ‘one
last time’ principle in the 2004 guidelines. The
time,
company’s need for financing was due to its incapacity
to reform with a view to reducing its internal costs,
despite the State aid which it had already received.

(41) Moreover, according to BA, the measure in question was
not liquidity support in the form of loan guarantees or
loans, but had the characteristics of an injection of
capital guaranteeing the Italian Government effective
control of the company (paragraph 25(a) of the 2004
guidelines).

(42) With regard to the condition in the 2004 guidelines
linked to the existence of serious social difficulties, BA
stressed that the insolvency of Alitalia would not cause
serious disruption to passengers, owing to the existence
of competitors on both national and international routes.
As for adverse spillover effects on its competitors, these
resulted from the preservation of Alitalia on the market
despite its financial difficulties, the increase in its number
of routes, particularly from Rome and Milan to Los
Angeles, and the reduction in its fares. These commercial
decisions were not rational given the company’s financial
situation and demonstrated its wish to increase its market
share as compared to those of its competitors not in
receipt of State aid (paragraph 25(b) of
the 2004
guidelines).

(38)

Both Neos and Ryanair denounced the distortion of
competition which resulted from the support which
Alitalia had received from Italy for many years.

(43) Moreover, the measure in question was not granted to
Alitalia for a period limited to six months, as required by
the 2004 guidelines (paragraph 25(c)).

(39) As regards compatibility of the measure in question with
the common market, BA believed that
the measure
constituted rescue aid and must thus comply with the
conditions set out in the 2004 guidelines. This aid had
not been notified to the Commission before being im­
plemented and did not satisfy the conditions of those
guidelines.

(40)

In this connection, BA pointed out that this measure
could not be granted without infringing the ‘one time,
last time’ principle in the guidelines (paragraph 25(e) of
the 2004 guidelines), since Alitalia had already received
restructuring aid approved by the Commission. BA added
time’
that
principle under paragraph 73 of the guidelines was not
applicable in the case in point, since Alitalia had not had
to deal with unforeseen circumstances for which it was
not responsible. In this context, BA and Sterling Airlines

the exemption from the ‘one time,

last

(44)

(45)

characterised by non-essential

Lastly, BA pointed out that, as this commercial strategy
expenses being
was
incurred,
the aid in
it could not be guaranteed that
question was limited to the amount needed to keep the
company in business for the period for which it was
authorised, as this amount had to be based on the
liquidity needs of the company stemming from losses
(paragraph 25(d) of the 2004 guidelines).

Ryanair criticised the Commission for not having already
demanded the immediate suspension of the measure and
asked that Alitalia be required to immediately repay the
EUR 300 million that had already been granted to it by
Italy. Ryanair also stressed that, contrary to the claims of
the Italian authorities, no motive of public order and
territorial continuity could be invoked to justify the
granting of the measure in question to Alitalia. In this
context, Ryanair referred to the reduction in Alitalia’s
market share on certain routes.

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(46)

the measure

the European Travel Agents’ and Tour
By contrast,
Operators’ Associations
(ECTAA) and the Guild of
European Business Travel Agents (GEBTA) considered
that granting
in question aimed at
preventing Alitalia’s bankruptcy was likely to protect
legislation protecting
in the absence of
consumers
passengers
going
the
event of
in the
bankrupt. ECTAA and GEBTA added that granting the
loan in question was the only reasonable solution to
avoid Alitalia going bankrupt and to help it in its priva­
tisation process. Given the prospects for relaunching the
company reported in the press, granting this loan was
economically justified in order to lead to a complete
restructuring of Alitalia with a view to future profits.

company

6. SUMMARY OF PAST COMMISSION DECISIONS
CONCERNING ALITALIA

(47)

For the purposes of analysing the measure in question, it
is worth recalling here
the Commission has
previously taken the following Decisions in relation to
Alitalia:

that

(48)

— Commission Decision of 15 July 1997 concerning
the recapitalisation of Alitalia (11):
in this Decision,
the Commission considered that, subject to certain
recapitalisation of
undertakings being met,
the
Alitalia in the form of a capital
injection of 2 750
billion Italian lire was State aid compatible with the
common market under Article 87(3)(c) of the EC
Treaty.

— Commission Decision of 18 July 2001 concerning
the recapitalisation of Alitalia (12): since its Decision
of 15 July 1997 had been annulled by the Court of
Instance (13), the Commission adopted a new
First
Decision concerning the same recapitalisation.
In
the Commission reached the same
this Decision,
conclusion as in its Decision of 15 July 1997,
namely that the recapitalisation of Alitalia was State
aid compatible with the common market (14).

— Commission Decision of 19 June 2002, C 54/96 and
N 318/02 — Third instalment of aid for the restruc­
turing of Alitalia approved by the Commission on
18 July 2001 and new recapitalisation of EUR 1,4
billion (15): with this Decision,
the Commission
approved
instalment
third
abovementioned
(EUR 129 million) and considered that the new reca­
pitalisation was not State aid within the meaning of
Article 87(1) of the Treaty.

the

(11) OJ L 322, 25.11.1997, p. 44.
(12) OJ L 271, 12.10.2001, p. 28.
(13) Judgment of the Court of First Instance of 12 December 2000 in

Case T-296/97, Alitalia v Commission (ECR II-3871).

(14) The appeal lodged by Alitalia against the Commission Decision of
18 July 2001 was rejected by the Court of First Instance in its
judgment of 9 July 2008 in Case T-301/01, Alitalia v Commission
(not yet published in the ECR).

(15) OJ C 239, 4.10.2002, p. 2.

— Commission Decision of 20 July 2004, N 279/04 —
Urgent measures in support of the restructuring and
aid) (16): with this
relaunch of Alitalia
(rescue
Decision, the Commission authorised rescue aid in
the form of a State guarantee for a bridging loan of
EUR 400 million (17).

— Commission Decision 2006/176/EC of 7 June 2005
on Alitalia’s industrial restructuring plan (18): in this
Decision,
the
measures in question did not constitute State aid
within the meaning of Article 87(1) of the Treaty.

the Commission considered that

7. ASSESSMENT OF THE MEASURE IN THE LIGHT OF
ARTICLE 87(1) OF THE TREATY

Following the formal investigation procedure initiated on
the basis of Article 88(2) of
the Treaty, and taking
account of the arguments submitted in this connection
by the Italian authorities and the interested parties, the
Commission believes
the measure in question,
namely the EUR 300 million loan granted to Alitalia,
the value of which can be counted as part of
the
company’s capital, constitutes State aid which is incom­
patible with the common market within the meaning of
Article 87(1) of
the Treaty and unlawful within the
meaning of Article 88(3) of the Treaty.

that

7.1. Existence of State aid

(49) According to Article 87(1) of the Treaty, ‘any aid granted
by a Member State or through State resources in any
form whatsoever which distorts or threatens to distort
competition by favouring certain undertakings or the
production of certain goods shall, in so far as it affects
trade between Member States, be incompatible with the
common market’.

(50)

Classifying a national measure as State aid presupposes
that the following cumulative conditions are met: 1. the
measure in question confers an advantage through State
resources; 2.
the
measure distorts or
threatens to distort competition
and is capable of affecting trade between Member
States (19).

the advantage is

selective; and 3.

(51)

It is appropriate to set out the factors which allow the
Commission to consider, at this stage, that the measure
in question satisfies these cumulative conditions.

(16) OJ C 125, 24.5.2005, p. 7.
(17) An action for annulment of this Decision has been submitted by
Air One and is currently pending before the Court of First Instance
(Case T-344/02).

(18) OJ L 69, 8.3.2006, p. 1.
(19) See, for example, the judgment of the Court of Justice in Case C-
222/04, Ministero dell’Economia e delle Finanze v Cassa di Risparmio di
Firenze (ECR I-289, paragraph 129).

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(52)

7.1.1. The existence of an advantage conferred through State

resources

that

It should first be pointed out
the measure in
question is a loan, the value of which can be counted
as part of Alitalia’s capital (20), directly granted to the
company by the Italian State, and thus involving the
transfer of State resources. Moreover,
this measure is
the responsibility of the Italian State, since the decision
to grant the loan was adopted by the Italian Council of
Ministers on 22 April 2008 and supplemented by
Decree-Law No 93 of 27 May 2008.

(53) As for whether there is an economic advantage, it should
be assessed whether, in similar circumstances, a private
investor could have been led to provide a capital
injection such as that in the case in point. Here, the
stated that, although the conduct of a
Court has
private investor with which the intervention of
the
public investor pursuing economic policy aims must be
compared need not be the conduct of an ordinary
investor laying out capital with a view to realising a
profit in the relatively short term,
it must at least be
the conduct of a private holding company or a private
group of undertakings pursuing a structural policy —
whether general or sectoral — and guided by prospects
of profitability in the longer term (21).

ciples, it is necessary to take account of Alitalia’s financial
situation and the characteristics of the State intervention
in question.

7.1.1.1. A l i t a l i a ’ s f i n a n c i a l s i t u a t i o n

(57) With regard to the financial situation of Alitalia,

the
it was very precarious at the
Commission notes that
time of granting of the loan in question and adoption
of Decree-Law No 93. Indeed, Alitalia recorded conso­
lidated losses of EUR 626 million for the 2006 financial
the 2007 financial
year and EUR 495 million for
year (24).

(58) Moreover, according to financial

information published
by the company, Alitalia recorded pre-tax losses of
EUR 214,8 million in the first quarter of 2008, a 41 %
increase on the same period in 2007. Furthermore, as at
30 April 2008, Alitalia’s net debt stood at EUR 1,36
billion, an increase of 13 % on the December 2007
level. At the same time, the liquidity position, including
short-term financial
loans, was EUR 174 million as at
30 April 2008, a fall of 53 % as compared to the end
of December 2007 (25).

(54)

The Court has also ruled that a private shareholder may
reasonably provide the capital necessary to secure the
survival of
experiencing
an undertaking which is
temporary difficulties but is capable of becoming profi­
table again, possibly after restructuring. However, when
injections of capital by a public investor disregard any
prospect of profitability, even in the long term, such
provision of capital must be regarded as aid within the
meaning of Article 87 of the Treaty (22).

(59)

(60)

(55)

It should also be pointed out that, according to settled
case-law, both the existence and the amount of aid must
be assessed in the light of the situation prevailing at the
time it was granted (23).

(56)

In the case in point, for the purposes of applying the
private investor criterion and the abovementioned prin­

(20) The measure covered by this Decision is based on the aforemen­

tioned Decree-Laws Nos 80 and 93.

(21) See, inter alia, the judgment of the Court of Justice of 14 September
1994 in Cases C-278/92, C-279/92 and C-280/92, Spain v
Commission (ECR I-4103, paragraphs 20 to 22).

(22) See, for example, the judgment of the Court of Justice of 21 March
1991 in Case C-303/88, Italy v Commission (ECR I-1433, paragraphs
21 and 22).

(23) See, for example, the judgment of the Court of First Instance of
19 October 2005 in case T-318/00, Freistaat Thüringen v Commission
(ECR II-4179, paragraph 125).

This situation is shown equally clearly by Decree-Law No
that granting the loan in
80, which states,
question should make possible the recovery of
the
company and allow it to meet its immediate liquidity
needs (see recitals 57 and 58 above).

inter alia,

In their reply of 30 May 2008 to the Commission, the
Italian authorities also stated that Decree-Law No 93 was
adopted as a result of the worsening financial situation of
the company and was intended to enable it to safeguard
its value and ensure that it remained in business. In this
context,
the measures taken were
aimed at ensuring that its losses did not make share
capital and reserves fall below the legal
limit, thereby
preventing insolvency proceedings (procedura concorsuale)
and the placing of the company in liquidation.

they indicated that

(61) On 3 June 2008, the Italian authorities adopted Decree-
Law No 97 (26), which also referred to the financial
situation of Alitalia described above and substantiated
this analysis.

(24) Data sent by the Italian authorities in their letter of 30 May 2008

to the Commission.

(25) See the financial

results available on Alitalia’s website (http://

corporate.alitalia.com/en/investors/financial/index.aspx).

(26) Decreto-legge no 97, Disposizioni urgenti

in materia di moni­
toraggio e trasparenza dei meccanismi di allocazione della spesa
pubblica, nonché in materia fiscale e di proroga di
termini
(Official Gazette of the Italian Republic No 128 of 3 June 2008).

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(62)

(63)

In view of all these factors, it is possible to consider that
Alitalia’s financial situation was very precarious, both as
at the date of granting of the EUR 300 million loan by
means of Decree-Law No 80 and as at that of adoption
of Decree-Law No 93, as indeed the Italian authorities
admitted in their
letter of 30 May 2008 to the
Commission. The Commission considers it appropriate
to point out
this assessment
in this connection that
was in no way questioned by the Italian authorities in
their comments on initiation of the formal investigation
procedure (27).

financial

In this context, the Commission also considers it appro­
priate to point out that Alitalia’s financial situation has
worsened since 1997 and been very precarious since
the
2001, as demonstrated by the description of
company’s
situation in the Commission
Decisions of 18 July 2001, 20 July 2004 and 7 June
2005 (previously cited, see recital 47 above). The State
support measures which the company has benefited from
the difficulties
since 1997 provide ample proof
encountered by the company for almost ten years have
been overcome repeatedly through the intervention of
the State as shareholder.

that

for setting the reference and discount rates (31), which
states that ‘the reference rate thus determined is a floor
rate which may be increased in situations involving a
particular risk (for example, an undertaking in difficulty,
or where the security normally required by banks is not
provided). In such cases, the premium may amount to
400 basis points or more if no private bank would have
loan’. The Commission
agreed to grant
believes that even a premium on the reference rate of
100 basis points, as provided for by Decree-Law No 93,
does not
the particularly
precarious situation of Alitalia at the time of granting
of the measure.

take sufficient account of

the relevant

it

(66) As for the Communication from the Commission on the
the method for setting the reference and
revision of
discount rates (32),
to the
is enough to note that,
extent that it is applicable, since the loan was granted
before its entry into force and the classification of a
measure as aid is assessed in relation to the time of its
granting, the Italian authorities have not replied to the
doubts expressed by the Commission in its Decision of
11 June 2008. Accordingly, the doubts expressed by the
Commission in this connection remain.

7.1.1.2. C h a r a c t e r i s t i c s o f

t h e S t a t e i n t e r ­

v e n t i o n

(64) With regard to the conditions

for granting of

the Commission notes,

the
measure in question,
firstly,
that, according to Decree-Law No 80, the interest rate
applicable is that indicated in the Commission notice on
current State aid recovery interest
rates and refer­
ence/discount rates for 25 Member States applicable as
from 1 January 2008 and, with effect from 1 July 2008,
the rate indicated in the Communication from the
Commission on the revision of the method for setting
rate was
the reference and discount
increased by 1 % by Decree-Law No 93 (29).

rates (28). This

(65) With regard to the Commission notice on current State
aid recovery interest rates and reference/discount rates for
25 Member States applicable as from 1 July 2008 (30), it
is important to note that the rates therein are supposed
to reflect the average level of the interest rates in force in
the various Member States for medium- and long-term
security is
loans
even
that,
provided.
increased by 1 %, these rates cannot be considered appro­
priate, since the financial situation of the company in
question is very precarious. Furthermore, this notice is
based on the 1997 Commission notice on the method

(five to ten years) where normal

The Commission

considers

(68)

(69)

(67) Accordingly, on the basis of

the

foregoing,

the
Commission believes that, even if a private investor in
a similar situation to that of the Italian State in the case
in point had agreed to granting the measure in question
to Alitalia, it would not have accepted the interest rate
being that applicable to a company in a normal financial
situation, even with a premium of 100 basis points.

in their

the interest

The Italian authorities’ comments
letter of
12 July 2008 cannot cast doubt over this assessment
rates applicable to the measure in
of
in their comments the Italian auth­
question.
their
orities
position,
set at a level
allowing a direct and appropriate return on the capital
to be guaranteed.

stated, without

simply
that

substantiating

the interest

rate was

Indeed,

The Commission notes that the decision of the Italian
Government to grant the loan in question was taken on
22 April 2008, following the withdrawal, on the same
day, of the bid by the Air France-KLM group to purchase
Alitalia (33), and that the adoption of Decree-Law No 93
was motivated by the company’s worsening financial
situation. Whatever the reasons for withdrawal of the
to
Air France-KLM bid, which were linked,
Alitalia’s financial situation (34),
the fact remains that
the decision to grant the loan in question immediately
followed this decision to withdraw the bid.

inter alia,

(27) See paragraph 9 of the letter from the Italian authorities to the

Commission dated 12 July 2008.

(28) See recital 12 above.
(29) See recital 5 above.
(30) Previously cited, see footnote 6.

(31) OJ C 273, 9.9.1997, p. 3.
(32) See footnote 6.
(33) A public share swap offer was submitted to Alitalia on 14 March
2008 and approved by its management board on 16 March 2008.
(34) See the previously cited letter from the Italian authorities to the

Commission dated 30 May 2008.

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(75)

(70)

In this connection, credence cannot be given to the
Italian authorities’ unsubstantiated claim that the non-
completion of this deal did not undermine the prospect
of privatisation in the absence of evidence demonstrating
the reality of such a plan as at the time of granting the
measure in question. The attempts
to privatise the
company to which the Italian authorities refer in their
letter of 30 May 2008 and which concern the period
between the end of 2006 and the end of 2007 are not
enough to demonstrate that a real alternative takeover
possibility existed when the measure in question was
granted.

in the event of

The Commission also believes that, given Alitalia’s very
precarious financial situation, such a private investor
would not have agreed to grant it any loan, much less
a loan the value of which could be counted as part of its
the
capital, which,
company, would not be reimbursed until after all the
jointly and in
other creditors had been paid off,
proportion to the share capital
(see Article 4(4) of
Decree-Law No 93). Use of the loan initially granted to
fill the gap in Alitalia’s capital further strengthens the
Commission’s analysis
the measure in question
constitutes State aid.

liquidation of

that

(71) With regard to the letter from Mr B. Ermolli to Alitalia,
to which the Italian authorities referred in their letter of
30 May 2008 and which, in their view, demonstrated the
interest of some Italian entrepreneurs and investors in
drawing up a plan to relaunch the company, this can
no longer be considered to be a prospect of privati­
sation (35).

(76)

In the light of all the foregoing, the Commission believes
that, by granting Alitalia the measure in question worth
EUR 300 million, the Italian State has not acted as a
shareholder pursuing a structural policy —
prudent
whether general or sectoral — guided by longer term
prospects of profitability on the capital
invested than
those of an ordinary investor (36).

that,

refer

letters

in their

(72) As for the developments after 30 May 2008 to which the
and, more
Italian authorities
the contract concluded on 9 and 10 June
precisely,
2008 between Alitalia and Intesa Sanpaolo, it is sufficient
for the purposes of assessing the
to point out
measure in question, account must be taken of
the
circumstances prevailing as at
the time when it was
granted. In any case, the Commission would point out
that the fact that Alitalia charged Intesa Sanpaolo in June
2008 with seeking a solution for privatisation of the
as
company
and
be
sure
immediate prospect of
the company, as
there was no certainty as at that date as to the success
of the task assigned to Intesa Sanpaolo.

considered
takeover of

cannot

a

(77)

The Commission concludes from this that, regardless of
the use of the relevant funds, the measure in question
confers an economic advantage to Alitalia through State
resources which it would not have received in normal
market conditions (37).

7.1.2. Selective nature of the measure

(78)

this loan gives Alitalia an economic
The granting of
advantage of which it is the sole beneficiary. Accordingly,
the measure in question is selective.

It should also be pointed out here that, when the
measure in question was granted by the Italian State,
none of Alitalia’s private shareholders took action to
support it alongside the State,
in order to enable it to
handle its immediate liquidity need.

(79)

(73)

(74)

The almost simultaneous occurrence of withdrawal of the
aforementioned takeover bid and granting of the loan by
the Italian Government, the absence of other recovery
prospects at the time of granting and the absence of
financial intervention from Alitalia’s private shareholders
alongside that of the Italian State reinforce the conclusion
that a shareholder of comparable size would not have
agreed to grant this loan, given the seriousness of the
situation.

(35) As stated in the Alitalia press release of 13 May 2008: ‘The Board
expressed its appreciation for the communication from Mr Bruno
Ermolli and awaits a clear statement of intent which proves to be
in line with the above indications in order
to agree to the
diligence’
requested
(http://corporate.alitalia.com/en/press/
press/index.aspx).

due

7.1.3. Effect on trade between Member States and distortion

of competition

The Commission considers that the measure in question
affects trade between Member States, as it concerns a
company whose transport activity, by its very nature,
directly concerns
several Member
trade and covers
States. It also distorts or threatens to distort competition
within the common market, as it is granted to only one
company which is in competition with other Community
airlines on its European network, particularly since the
entry into force of the third air transport liberalisation
package on 1 January 1993 (38).

(36) See,

for example,

Instance of
15 September 1998 in Cases T-126/96 and T-127/96, Breda
Fucine Meridionali v Commission (ECR II-3437, paragraph 79).
(37) See, for example, judgment of the Court of Justice of 11 July 1996

the Court of First

judgment of

in Case C-39/94, SFEI (ECR 3547, paragraph 60).

(38) Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing
of air carriers, Council Regulation (EEC) No 2408/92 of 23 July
1992 on access for Community carriers to intra-Community air
routes, Council Regulation (EEC) No 2409/92 of 23 July 1992
on fares and rates for air services (OJ L 240, 24.8.1992, p. 1).

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(80) Having regard to all of the foregoing, the Commission
believes, on the basis of the information it has at this
stage, that the measure worth EUR 300 million granted
to Alitalia by the Italian State constitutes State aid within
the meaning of Article 87(1) of the Treaty.

does not seek to remedy a serious disturbance in the
Italian economy. Nor does it seek to promote culture
and heritage conservation within the meaning of
the
exception in Article 87(3)(d) of the Treaty.

7.2. Classification of the aid measure as unlawful aid

(81) Under Article 88(3) of the Treaty, Member States must
notify any plans to grant or alter aid. The Member State
concerned may not put its proposed measures into effect
until this procedure has resulted in a final decision.

(82)

The Italian Government decided to grant the EUR 300
million loan on 22 April 2008 by means of Decree-Law
No 80. The funds were thus made available to Alitalia on
that date, as indeed the Italian authorities themselves
confirmed at
their meeting with the Commission on
23 April 2008. For its part, Decree-Law No 93, which
provided for the option of counting the value of the loan
as part of the company’s capital, was adopted on 27 May
2008.

(83) However, the Commission notes that this measure was
not notified to it by Italy either on the date of adoption
of Decree-Law No 80 or on that of adoption of Decree-
Law No 93. Accordingly, the Commission believes that
Italy has acted unlawfully in granting the aid in question
contrary to Article 88(3) of the Treaty.

(87)

The Commission takes the view,
in relation to the
exception provided for in Article 87(3)(c) of the Treaty,
which authorises aid to facilitate the development of
certain economic activities where such aid does not
affect trading conditions to an extent contrary to the
common interest, that there is no basis for considering
that the aid in question is compatible with the common
market. Indeed, none of the exceptions provided for in
this connection by the Commission’s guidelines on the
application of Articles 92 and 93 of the EC Treaty and
Article 61 of the EEA Agreement to State aids in the
aviation sector (39), as supplemented by the Commission
Communication (concerning) Community guidelines on
financing of airports and start-up aid to airlines departing
from regional airports (40), appear to apply in the case in
point.

has

some

authorised

(88) Moreover, although, as an exceptional measure,
operating

the
aid
Commission
schemes in the air transport sector on the basis of the
1998 guidelines on national regional aid, as amended in
2000 (41),
to airlines operating from the outermost
regions, with a view to offsetting the additional costs
arising from the permanent disadvantages facing those
regions, as identified in Article 299(2) of
the Treaty,
this exception is not relevant in the current context.

7.3. Compatibility of

the aid measure with the

(89)

common market

The Commission would point out that, in their letters,
the Italian authorities did not assert that the aforemen­
tioned exemptions were applicable in the case in point.

(84)

(85)

the Treaty,

the measure in
Since the Commission considers that
question constitutes State aid within the meaning of
Article 87(1) of
is necessary to assess
whether it is compatible with the common market in
the light of the exceptions provided for in paragraphs
is
2 and 3 of
necessary to bear in mind that the beneficiary of the
aid measure is in the air transport sector.

In this connection,

that Article.

it

it

The Commission notes that the exceptions provided for
in Article 87(2) of the Treaty, which concern aid of a
social character granted to individual consumers, aid to
make good the damage caused by natural disasters or
exceptional
the
and
economy of certain areas of
the Federal Republic of
Germany, are irrelevant in the current context.

occurrences

granted

aid

to

(90) As for the Italian authorities’ argument concerning the
need to guarantee the public service provided by Alitalia
for reasons of public order and territorial continuity, the
Commission notes that
this unsubstantiated assertion
alone is not sufficient to enable it to consider that the
aid measure in question is compatible with the common
market.

(91)

Lastly, the Commission believes that the aid measure in
question cannot be declared compatible with the
common market pursuant
to the 2004 guidelines.
Although Alitalia could be classed as a firm in difficulty
within the meaning of those guidelines, the other cumu­
lative conditions allowing the loan in question to be
considered rescue aid are not met in the case in point.

(86) As for the exception in Article 87(3)(b) of the Treaty, it is
sufficient to note that the aid measure in question is not
an important project of common European interest and

(39) OJ C 350, 10.12.1994, p. 5.
(40) OJ C 312, 9.12.2005, p. 1.
(41) OJ C 258, 9.9.2000, p. 5.

(92)

(93)

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L 52/13

effects

spillover

Firstly, the Commission notes that the Italian authorities
the measure in question
have not demonstrated that
would not have adverse
in other
Member States (42). In relation to this point, the Italian
authorities merely asserted that the privatisation process
the measure in
and the granting,
in this context, of
question was a process of a general nature,
since
granting of
the measure did not enable Alitalia to
implement competitive strategies. The Italian authorities
in no way detailed the serious social difficulties justifying
granting of the measure in question.

purposes of keeping the company in business (paragraph
25(d) of the 2004 guidelines). Indeed, the Italian auth­
orities merely asserted, in their letters, that the total value
of
the intervention in favour of Alitalia was strictly
necessary and proportional to the aim of safeguarding
the survival and assets of the company. In this context,
contrary
the
description of the company’s financial situation in their
letter of 30 May 2008 to the Commission does not allow
such a conclusion to be drawn.

Italian authorities’

assertion,

to the

that

Secondly, the Italian authorities have not given an under­
taking to send, not
later than six months after the
measure has been implemented, either a restructuring
plan, a liquidation plan or proof
the loan has
been repaid in full (43). In their letters, the Italian au­
thorities referred to the existence of both a restructuring
plan and a timetable for repayment of the measure in
question. However, the Italian authorities’ assertion that
the restructuring plan is part of Alitalia’s
drafting of
privatisation process undertaken since 2006 is not
sufficient for it to be considered that the Commission
has received a formal undertaking concerning sending
of an actual plan for restructuring the company within
six months of granting of the measure.

to

the

consider

condition

(94) Moreover, the supposed timetable for repaying the loan
in Decree-Law No 93 does not allow the
set out
Commission
in
that
paragraph 25(c) of the 2004 guidelines has been met.
Indeed, the fact that the loan in question must be repaid
as quickly as possible between the 30th day after transfer
of Alitalia’s share capital and 31 December 2008 does
not allow it to be considered that the Italian authorities
its full repayment
have undertaken to send proof of
within six months of granting of
the measure by
Decree-Law No 80, i.e. by 23 October 2008 at the latest.

(95)

the amount

liquidation of

the company,

In any case, the Italian authorities glossed over the fact
that Article 4(4) of Decree-Law No 93 states that, in the
event of
in
question will be repaid only after all the other creditors
have been paid off, jointly and in proportion to the share
this possibility came about, would
capital, which,
undermine any prospect of
repayment. Reference in
this Decree-Law to the possibility of liquidation of the
company cannot be considered as an undertaking by
than six
later
Italy to send a liquidation plan not
months after implementation of the measure.

if

(96)

Thirdly,
the Italian authorities have not demonstrated
that the value of the aid in question is justified for the

(97)

last

time’

Fourthly, and in any event, it cannot be considered that
Alitalia has complied with the condition linked to the
rule (44) — whether the aid is
‘one time,
considered rescue aid or restructuring aid. It should be
recalled that, according to the 2004 guidelines,
if a
company has already received rescue or restructuring
aid in the past and if fewer than ten years have passed
since granting of the rescue aid, since the end of the
restructuring period, or since the end of implementation
of
the Commission will not authorise new
rescue or restructuring aid.

the plan,

(98) However, Alitalia has already received restructuring aid
which was approved by the Commission by Decision of
18 July 2001 (45) and rescue aid in the form of a State
guarantee for a EUR 400 million bridging loan approved
by the Commission by Decision of 20 July 2004 (46).
Since ten years have not passed since the latter aid was
granted, Alitalia cannot receive the aid in question in the
case in point.

(99)

It is nevertheless true that the 2004 guidelines provide
for exceptions to the ‘one time, last time’ rule. However,
the Commission notes that the conditions of paragraph
73(a) and (b) have not been met in the case in point.
Moreover, the Italian authorities have not asserted that
these exceptions are applicable in the case in point.

(100) Furthermore, the Commission believes that the exception
provided for in paragraph 73(c) of the 2004 guidelines
linked to the existence of exceptional and unforeseeable
circumstances for which the company concerned is not
responsible does not apply in the case in point.

(101)

Indeed, it should be pointed out that, for several years,
Alitalia’s
financial difficulties have been recurrent,
meaning
the
that
company and used to justify granting of the measure
cannot be classified as exceptional, unforeseeable and
beyond the control of the company.

encountered by

the difficulties

(44) See section 3.1.1, paragraph 25(e) and section 3.3 of the 2004

guidelines.

(42) See paragraph 25(b) of the 2004 guidelines.
(43) See paragraph 25(c) of the 2004 guidelines.

(45) Commission Decision of 18 July 2001 (previously cited, recital 47).
(46) Commission Decision of 20 July 2004 (previously cited, recital 47).

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(102)

it

is appropriate to refer

to the
In this context,
description of Alitalia’s financial situation given in the
Commission Decisions of 18 July 2001, 20 July 2004
and 7 June 2005 (previously cited), which refer to the
company’s situation as being difficult since 1997 and
worrying after 2001 (47). Furthermore, Alitalia’s very
precarious financial situation as at the date of granting
of the measure in question demonstrates the failure of
the restructuring plan notified to the Commission in
2004, which was the subject of the latter’s decision of
7 June 2005 (48).

(103) The support measures granted to Alitalia by the Italian
authorities in recent years are further proof of
the
this precarious financial situation
recurrent nature of
(see section 7 above) (49).

(104)

In this context, the very difficult situation facing the air
transport sector, which is linked in particular to an accel­
eration in the increase in the price of oil during the first
six months of 2008, does not, on its own, explain the
particularly precarious financial situation of Alitalia for
many years.
in this connection,
that, according to the aforementioned Decree-Law No

It should be recalled,

(47) The Decision of 18 July 2001 states the following:

injection of

indebtedness,

‘[F]or, despite
the improvements following adjustments to the restructuring plan
in February and June 1997, as notified to the Commission on
26 June 1997, Alitalia must still be considered a company with a
very high specific risk. In this respect, it should be noted that: […]
the company is in an extremely difficult and precarious financial
situation. With its own resources at virtually zero at the beginning
the company only
of 1996 and a high level of
avoided bankruptcy thanks to a capital
ITL 1 000
billion in June 1996. Considering the size of the company and
the anticipated amount of the investment, this insecure financial
situation is a factor which may in itself discourage any investor
operating according to the principles of the market economy.’ It
can also be seen from the Decision of 20 July 2004 that, after
2001, Alitalia’s financial situation continued to be worrying, and
that an indication of the increasing seriousness of the situation was
that the company’s shares were suspended on 4 May 2004 after
falling by 15 % to EUR 0,1995 and that Alitalia’s auditors had
noted a deterioration in its financial situation and indicated that,
in the absence of incisive and appropriate measures, this financial
situation would mean that a new solution, including possibly liqui­
dation, would have to be found. Lastly, see the Decision of 7 June
2005, where the company’s situation as at July 2004 is referred to
again.

(48) It is worth remembering that the restructuring plan submitted to
the Commission in 2004 provided for ‘an annual improvement of
including EUR 200 million as a
around EUR 1 billion by 2008,
result of the load factor and some EUR 770 million from other
improvements
aspects of
brought about by the latter are […]
savings on purchases,
commercial expenses and staff expenses’
(see recital 203 of the
Decision of 7 June 2005).

the plan; among the most significant

(49) The 2004 guidelines state that ‘if rescue aid is granted to a firm that
has already received restructuring aid, it can be considered that the
beneficiary’s difficulties are of a recurrent nature and that repeated
State interventions give rise to distortions of competition that are
contrary to the common interest. Such repeated State interventions
should not be permitted’ (end of paragraph 72).

80 of 23 April 2008, the reason for granting the loan
was the company’s financial situation and its immediate
liquidity need and that Decree-Law No 93 was adopted
as a result of the company’s worsening financial situation
and was intended to enable it to safeguard its value,
thereby ensuring that it remained in business (50).

(105) While there is thus no doubt that the current economic
situation is contributing to accentuating the difficulties
facing Alitalia, the fact remains that its economic diffi­
the current
culties existed earlier and, moreover,
situation affects all air carriers.

that

(106) Accordingly,

in the case in point,

it is not possible to
derogate from the ‘one time, last time’ principle of the
2004 guidelines.

(107)

Italy’s reference to the Bull Decision does not cast doubt
on this analysis.

(108)

In that Decision, the Commission considered that, in the
specific circumstances of the case in point, the ‘one time,
last time’ principle did not prevent authorisation of the
aid notified by France, even though the period of ten
years before granting of new restructuring aid had not
passed. According to the Commission in that Decision,
the philosophy of that principle, namely to prevent any
unfair support, had been respected, since France had not
propped Bull up artificially in the face of difficulties of a
recurrent nature.

(109) However,

it should be pointed out that the guidelines
applicable to Bull were the 1999 guidelines rather than,
in the current case, the 2004 guidelines (51). Unlike the
1999 guidelines, those for 2004 provide for account to
be taken, for the purposes of application to rescue or
recovery aid of the ‘one time,
last time’ principle, not
aid
only of
previously granted to the company concerned. The
the 2004
Commission also points out
guidelines,
from being
to prevent
unfairly assisted when they can survive only thanks to
repeated State support, rescue or restructuring aid should
be granted once only (see paragraph 72).

that, under
firms

restructuring aid, but

in order

also of

rescue

(50) See recital 57 above.
(51) See the footnote 9 of the Bull Decision (previously cited).

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(110) Furthermore, unlike the specific circumstances of the Bull
case (52), the difficulties facing Alitalia and used to justify
granting of
the measure in question are not, as has
previously been noted, linked to the current unfavourable
situation in the air transport sector. Moreover, these diffi­
culties are undoubtedly of
the same nature as those
which the company previously faced, as demonstrated
by the description of its financial situation since 1997
(see recitals 57 and 58 above) and, unlike the facts in the
Bull case (53), are recurrent in nature.

financial

(116) The Commission would point out again that, given
Alitalia’s very precarious
situation and the
conditions for granting of the measure in question, a
private investor would not have agreed to grant it any
loan, much less a loan the value of which is to be
counted as part of its capital. Given the nature of the
measure in question and the
its
granting, the Commission believes that the aid to be
recovered is the entirety of the loan.

circumstances of

(111) Lastly, contrary to what the Commission noted in the
Bull Decision (54), Alitalia received both restructuring aid
and rescue aid in the form of a State guarantee, and the
period which has been running since the granting of
these aid measures is not close to completion.

(117) For the purposes of such recovery, account must also be
taken of interest, from the date on which the aid in
question was made available to the company,
i.e.
22 April 2008, until the date of actual recovery (57).

(112)

conditions under

It follows from this that, even supposing that the other
the 2004 guidelines
cumulative
allowing the loan in question to be considered rescue
aid had been satisfied — which is not the case — the
condition linked to the ‘one time, last time’ principle has
not been satisfied in the case in point and it is not
possible to derogate therefrom by applying one of the
exceptions provided for
the
guidelines.

in paragraph 73 of

(113)

It follows from all of the foregoing that the aid measure
in question is not compatible with the common market.

7.5. Conclusion

(118) The Commission finds that
Italy has unlawfully im­
loan of
plemented an aid measure
comprising a
EUR 300 million granted to Alitalia, which can be
counted as part of the company’s capital, contrary to
Article 88(3) of the Treaty.

(119)

Italy must

In consequence,
the necessary
measures to recover this State aid which is incompatible
with the common market. It must recover this aid from
its beneficiary, namely Alitalia,

take

all

7.4. Recovery

HAS DECIDED AS FOLLOWS:

(114) The Commission would point out

that, pursuant

to
Article 14(1) of Council Regulation (EC) No 659/1999
of 22 March 1999 laying down detailed rules for the
application of Article 93 (now Article 88) of the EC
Treaty (55), any aid which is unlawful and incompatible
with the common market must be recovered from the
beneficiary.

Article 1

The EUR 300 million loan granted to Alitalia and capable of
being counted as part of its capital, which was implemented by
Italy contrary to Article 88(3) of the Treaty,
is incompatible
with the common market.

(115) Since the measure in question was granted unlawfully to
Alitalia and is incompatible with the common market, it
must be recovered from it (56).

(52) See recital 71 to the Bull Decision (previously cited).
(53) See recital 73 to the Bull Decision (previously cited).
(54) See recital 74 to the Bull Decision (previously cited).
(55) OJ L 83, 27.3.1999, p. 1.
(56) The Commission would point out that the conditions enabling it to
adopt a decision requiring Italy to provisionally recover the measure
in question before adoption of this Decision were not met in the
case in point, particularly as the existence of a serious risk of
substantial and irreparable damage to a competitor of Alitalia was
not demonstrated (see Article 11(2) of the previously cited Regu­
lation (EC) No 659/1999).

Article 2

Italy shall recover the aid referred to in Article 1 from the

1.
beneficiary.

The sums to be recovered shall bear interest from the date
2.
on which they were made available to the beneficiary until they
are actually recovered.

(57) See Article 14(2) of Regulation (EC) No 659/1999 (previously cited)

and recitals 80, 83 and 113 above.

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The interest shall be calculated on a compound basis in
3.
accordance with Chapter V of Regulation (EC) No 794/2004 (58)
and Regulation (EC) No 271/2008 amending Regulation (EC)
No 794/2004 (59).

Article 3

1.
Recovery of
immediate and effective.

the aid referred to in Article 1 shall be

Italy shall ensure that this Decision is implemented within

2.
four months following the date of its notification.

Article 4

1. Within two months
Decision,
Commission:

this
Italy shall notify the following information to the

following notification of

(a)

the total amount (principal and interest) to be recovered
from the beneficiary;

(b) a detailed description of the measures already taken and

those planned to comply with this Decision;

(58) OJ L 140, 30.4.2004, p. 1.
(59) OJ L 82, 25.3.2008, p. 1.

(c) documents demonstrating that

the beneficiary has been

ordered to repay the aid.

2.
Italy shall keep the Commission informed of the progress
of the national measures taken to implement this Decision until
complete recovery of the aid referred to in Article 1. It shall
immediately submit, on simple request by the Commission, any
information on the measures already taken and those planned
It shall also provide detailed
to comply with this Decision.
information concerning the amounts of aid and interest
already recovered from the beneficiary.

Article 5

This Decision is addressed to the Italian Republic.

Done at Brussels, 12 November 2008.

For the Commission

Antonio TAJANI
Vice-President

List of interested parties who submitted comments to the Commission under Article 88(2) of the Treaty

ANNEX

1. Sterling Airlines A/S

2. British Airways plc

3. Ryanair

4. Neos SpA

5. The European Travel Agents’ and Tour Operators’ Associations and the Guild of European Business Travel Agents