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Italy rejects Lufthansa's call to block Alitalia-Etihad deal

'Germans wanted company to go bankrupt', says transport minister

04 February, 17:59
Italy rejects Lufthansa's call to block Alitalia-Etihad deal (ANSA) - Rome, February 4 - The Italian minister of transport on Tuesday called a request by Germany's largest airline to the European Commission to halt Etihad Airways's planned investment in Alitalia a "disproportionate reaction".

"The truth is that the Germans were hoping Alitalia would go bankrupt, enabling them to divide up the remains of our market and transform our airports into small stops for air traffic heading to Frankfurt and Munich," Minister Maurizio Lupi told Italian media.

Lufthansa called on the European Commission on Monday to halt the planned investment from the Abu Dhabi-based carrier, alleging the use of State aid in disguise to break competition rules. The complaint by Frankfurt-based Lufthansa came as Alitalia CEO Gabriele Del Torchio said the troubled Italian carrier was poised to sign a financing deal with banks which was part of a 500-million-euro bailout package organized last fall by the Italian government.

It was later revealed that banks pledged about 165 million euros, with a remaining 35 million euros to come later.

The investment is critical to Italy's cash-strapped national carrier as it struggles to survive until it can find a solvent partner, such as Etihad.

However, Monday's move by Lufthansa, Europe's largest airline, could act as a stumbling block to the plan by government-owned Etihad to invest in the Italian carrier and establish deeper roots in the lucrative European market.

"Alitalia and Etihad are two private enterprises,'' the minister underscored. "The government simply provides consistent support to an infrastructure strategy. Have the French or Germans ever done it differently? They should stop calling on the EU to limit opening up to competition. They will find fierce opposition in Brussels". He went on to note that Italy was "years behind" in infrastructure strategies and that "Etihad's investment is an opportunity for everyone". Brussels has not yet commented on the case. A spokesman said Tuesday it would look into the capital increase and follow developments closely. European sources have said in relation to the complaint by Lufthansa that Article 107 of the Treaty of the Functioning of the European Union, which regulates state-aid control by the Commission, mentions 'State aid from an EU Member State', and thus does not encompass third countries. Meanwhile, Alitalia trade unions will be meeting at 18:00 (17:00 GMT) on Tuesday to continue talks on the company's industrial plan and to assess the overall situation after Premier Enrico Letta's visit to the UAE and the 165 million euros in financing granted by banks.