Carrier Italia Trasporto Aereo (ITA) will replace state-owned Alitalia and start flying in mid-October after Italy reached a long-awaited deal with the European Commission following months of haggling over the fate of the old, loss-making airline.
The negotiations focused on making ITA independent of Alitalia to ensure it was not liable for paying back billions of euros the old carrier had received in state aid.
ITA, which will be fully operational from Oct. 15, said in a statement it will aim to raise initial capital of 700 million euros ($826.70 million) to buy assets from the old company and begin operating.
Following the devastating impact of the COVID-19 pandemic on the airline industry, demand is beginning to recover but companies are still grounding many aircraft or flying nearly empty
The new airline, which was initially supposed to start operating in April, said it expected revenue of just above 3.3 billion euros in 2025. It added it would reach earnings before interest and taxes (EBIT) of 209 million euros and a break-even by the third quarter of 2023.
ITA will buy assets for its aviation business directly from Alitalia and it will bid in a public tender to acquire the carrier’s brand, which it sees as “an essential element in carrying out its industrial plan” and was one of the European Union requirements for the deal.
The outcome of the negotiations also means ITA will inherit only part of Alitalia’s flight slots, which are a major asset and proved a major sticking point in the talks.
ITA will get 85 per cent of the Alitalia slots at Milan’s Linate airport and 43 per cent at Rome’s Fiumicino hub.
The European Commission said it would remain in close contact with Rome to ensure that the launch of ITA would be in line with EU state aid rules.
It added that its investigations into the 1.3 billion euros granted to Alitalia were ongoing.