subject: state aid sa.58114 (2020/n) italy covid-19 aid to
TRANSCRIPT
S.E On. Luigi DI MAIO
Ministro degli affari esteri e della cooperazione internazionale
P.le della Farnesina 1
I - 00194 Roma Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111
EUROPEAN COMMISSION
Brussels, 4.9.2020 C(2020) 6194 final
In the published version of this decision,
some information has been omitted,
pursuant to articles 30 and 31 of Council
Regulation (EU) 2015/1589 of 13 July 2015
laying down detailed rules for the
application of Article 108 of the Treaty on
the Functioning of the European Union,
concerning non-disclosure of information
covered by professional secrecy. The
omissions are shown thus […]
PUBLIC VERSION
This document is made available for
information purposes only.
Subject: State Aid SA.58114 (2020/N) – Italy – COVID-19 aid to Alitalia
Excellency,
1. PROCEDURE
(1) By electronic notification of 20 July 2020,1 the Italian Republic notified aid to
Alitalia – Società Aerea Italiana S.p.A in Extraordinary Administration
(“Alitalia”) in the form of a EUR 199.45 million grant under the fund established
by Article 79 of Decree-Law No 18 of 17 March 2020 granting compensation to
airlines affected by the COVID-19 outbreak (“the measure”), in accordance with
1 The notification followed preliminary exchanges between the Italian authorities and the Commission
services, which started on 2 July 2020 with a first notification of a EUR 350 million aid in favour of
Alitalia from the Italian authorities. The latter gave the Commission further information about that
proposed aid measure during a call held on 13 July 2020. The Commission’s services sent a request for
information on 14 July 2020. On 20 July 2020, the Italian authorities withdrew their first notification
and notified the present aid measure. The Italian authorities replied to the request of information on 24,
27 and 28 July 2020. On 3 and 5 August 2020, the Commission services sent further additional
requests for information to the Italian authorities that replied on 13 and 18 August 2020. On 20 and 31
August and 2 September 2020, Italy submitted additional information. The Italian authorities and the
Commission services hold several conference calls throughout the notification procedure.
2
Article 108(3) of the Treaty on the Functioning of the European Union (“TFEU”).
On 4 September 2020, Italy amended and completed its notification.
(2) Italy exceptionally agrees to waive its rights deriving from Article 342 TFEU, in
conjunction with Article 3 of Regulation 1/1958,2 and to have the present decision
notified and adopted in English.
2. DESCRIPTION OF THE MEASURE
2.1. Objective of the measure
(3) Italy considers that the COVID-19 outbreak and the related governmental
restrictions severely affected the aviation sector in that Member State. In that
context, Decree-law No 18 of 17 March 20203 provides for the establishment of a
fund (‘the fund’) of EUR 350 million to make good the damage directly suffered
by airlines due to the imposition of travel restrictions and other containment
measures linked to the COVID-19 outbreak.
(4) To be eligible for damage compensation under the fund, a company must (i) hold
an air passenger license issued by the Italian Civil Aviation Authority (ENAC)
and (ii) be entrusted, on the date of adoption of Decree-Law No 18 (i.e. 17 March
2020) with public service obligations pursuant to Regulation (EC) No
1008/2008.4 A ministerial decree will establish the detailed arrangements for the
application of the provision providing for compensation under the fund.
(5) Alitalia meets the eligibility conditions to benefit from compensation under the
fund. Italy notified to the Commission the grant under that fund in favour of
Alitalia. Thus, the present decision only covers the assessment of the aid provided
to Alitalia.5
(6) Italy notified the measure under Article 107(2)(b) TFEU.
2.1.1. Travel restrictions linked to the COVID-19 outbreak
(7) The COVID-19 outbreak has resulted in travel restrictions imposed by Member
States and third countries and the closing down of the vast majority of passenger
air transport domestically, within the Union and globally.
2 Regulation No 1 determining the languages to be used by the European Economic Community, OJ 17,
6.10.1958, p. 385.
3 Decree-law of 17 March 2020, No 18, ‘Misure di potenziamento del Servizio sanitario nazionale e di
sostegno economico per famiglie, lavoratori e imprese connesse all'emergenza epidemiologica da
COVID-19’, as amended and converted into law by Law of 24 April 2020, n. 27, by Article 202 of
Decree-Law of 19 May 2020, n. 34 and by Law of 17 July 2020, n. 77.
4 Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008
on common rules for the operation of air services in the Community (Recast) OJ L 293, 31.10.2008, p.
3.
5 The scope of the present decision does not cover other potential beneficiaries eligible to receive
compensation from the fund or assess the conditions under which compensation can be granted under
the fund itself.
3
(8) Within the Union, Italy was the first country to be hit by the COVID-19 outbreak.
Italy declared a state of emergency on 31 January 2020, when it reported its first
cases of COVID-19 infections, and that state of emergency was to last until 31
July 2020.6 On 29 July 2020, Italy prolonged the state of emergency until 15
October 2020. 7
(9) In the course of February 2020, Italy adopted several measures to contain the
spread of the COVID-19 pandemic. It suspended flights from China, Taiwan,
Hong Kong and Macao to Italy as of 7 February 2020. On 21 February 2020, to
contain the growing number of infected persons in Italy, the Ministry of Health
implemented quarantine measures on the Italian territory for all persons that were
present in zones with confirmed cases.8
(10) In addition, the rapid spread of COVID-19 led to the cancellation of events and
fairs:9 as of 25 February 2020,
10 in Northern Italy all sport events and competition
were suspended, while throughout the Member State all school and universities
were offered the possibility to organise distance learning until further notice and
cultural centres were closed on Sundays and all exams (school, driving license,
etc…) were cancelled. On 1 March 2020, by Decree No 6 of the Prime Minister,11
Italy reinforced the restrictions by locking down several cities in Northern Italy
and considerably restricting all economic, transport, religious, cultural, educative
and sport activities in several regions of Northern Italy, while imposing health
and sanitary measures throughout the country.12
On 4 March 2020, Italy extended
the restrictions applicable in the northern regions to the entire national territory.13
6 Deliberation of the Ministry Council adopted during the meeting of 31 January 2020 on the declaration
for six months of the state of emergency on the national territory as a result of the COVID-19
outbreak.
7 https://www.gazzettaufficiale.it/eli/id/2020/07/30/20G00112/sg.
8 https://www.gazzettaufficiale.it/eli/id/2020/02/22/20A01220/sg.
9 https://www.gazzettaufficiale.it/eli/id/2020/02/25/20A01278/sg.
10‘ Decree of the Prime Minister of 25 February 2020, ‘Ulteriori disposizioni attuative del decreto-legge
23 febbraio 2020, n. 6, recante misure urgenti in materia di contenimento e gestione dell'emergenza
epidemiologica da COVID-19’.
11 Decree of the Prime Minister of 6 March 2020, ‘Ulteriori disposizioni attuative del decreto-legge 23
febbraio 2020, n. 6, recante misure urgenti in materia di contenimento e gestione dell'emergenza
epidemiologica da COVID-19’.
12 https://www.gazzettaufficiale.it/eli/id/2020/03/01/20A01381/sg. The restrictions applicable in certain
regions of Northern Italy included for example the suspension of all competition and sport events, all
activities involving gatherings of people and all school activities, in addition to health measures such
as social distancing in public places, bars and restaurants; homeworking; closure on week-end of shops
and malls; etc.
13 http://www.governo.it/it/articolo/coronavirus-firmato-il-dpcm-4-marzo-2020/14241.
4
(11) Several Member States, such as Austria,14
imposed limitations or bans on the
entry of persons coming from or through Italy. Such persons either were not
allowed to cross the borders of those Member States or had to undergo a period of
quarantine. Third countries also imposed limitations or travel warnings. For
example, on 28 February 2020 the United States of America advised its citizens to
avoid all but essential travel to Italy and not to travel to Lombardy and Veneto,
the worst affected regions at the time.
(12) On 8 March 2020, Italy imposed lockdown measures with immediate effect that
included travel restrictions in Northern Italy in response to the COVID-19
outbreak. Those general measures were extended to the entire national territory on
9 March 202015
with entry into force on 10 March 2020, and remained in force
until 2 June 2020.
(13) By Decree No 112 of 12 March 2020,16
the Ministry of Transport ordered the
closure of the majority of airports in Italy (except for 17 out of 39 commercial
airports in total where only governmental, cargo and emergency flights were
allowed). Those restrictions also covered all flights in Italy, with the exception of
those needed to ensure minimum essential services (health reasons, absolute
necessity). Those travel restrictions remained fully in force until 2 June 2020.17
(14) To contain the spread of the virus, on 16 March 2020 the Commission invited
Member States to apply a coordinated restriction on non-essential travel from
third countries to the Union for an initial period of 30 days,18
subsequently
extending it twice until 15 June 2020.19
The envisaged travel restriction, as well
as the invitation issued by the Commission on 11 June 2020 to prolong it until 30
June 2020, applied to all Schengen Member States (as well as Bulgaria, Croatia,
Cyprus, and Romania) and the four Schengen Associated States (Iceland,
Liechtenstein, Norway, and Switzerland) – 30 countries in total.20
14
The Austrian government released travel warnings regarding Italy and imposed partial restrictions on
travel to and from Northern Italy on 6 March 2020. The Romanian authorities did so as of 2 March
2020.
15 Decree of the Prime Minister of 9 March 2020, ‘Ulteriori disposizioni attuative del decreto-legge 23
febbraio 2020, n. 6, recante misure urgenti in materia di contenimento e gestione dell'emergenza
epidemiologica da COVID-19, applicabili sull'intero territorio nazionale’.
16 http://www.mit.gov.it/sites/default/files/media/notizia/2020-03/d.m.%20n.%20112%202020.pdf.
17 Italy prolonged Decree No 112 of 12 March 2020 on 12 and 29 April and on 17 May 2020, up to 2
June 2020.
18 Communication from the Commission to the European Parliament, the European Council and the
Council of 16 March 2020, COVID-19: Temporary Restriction on Non-Essential Travel to the EU,
COM/2020/115 final.
19 Communication from the Commission to the European Parliament, the European Council and the
Council of 8 May 2020 on the second assessment of the application of the temporary restriction on
non-essential travel to the EU, COM(2020) 222 final.
20 https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/travel-and-transportation-
during-coronavirus-pandemic_en
5
(15) As of 3 June 2020,21
Italy lifted the ban on the free movement within Italy, as
well as to and from other Member States and the four Schengen Associated
States. The restrictions remained applicable for movements to third countries until
30 June 2020.22
(16) On 2 June 2020, Italy partially lifted the restrictions on air services, allowing air
services to be commercially performed in 23 Italian airports, while the rest of the
airports remained closed until further notice.23
Until 12 June 2020, air services to
Sardinia could only be operated on the basis of public service obligations. On 14
June 2020, Italy expanded the list of open airports to 24 airports.24
(17) Most Member States reopened their borders with other Member States and the
Schengen Associated States as of mid-June 2020,25
following the
recommendation of the Commission to lift the internal borders controls and
restrictions on free movement within the Union by 15 June 2020.26
On that date,
some Member States still kept their borders closed or accepted only citizens from
a very limited list of countries (e.g. Denmark and Portugal), while others kept
their borders closed for incoming travellers from Italy (e.g. Cyprus and Malta).
(18) On 1 July 2020, Italy lifted restrictions on travel to and from third countries.
However, on 2 July 2020, Italy issued an ordinance imposing a quarantine period
for incoming travellers from third countries and furthermore banned entry into
Italy for persons who had stayed in and transited in some specific third countries,
namely those where the spread of the epidemic reached high levels of
contamination.
2.1.2. Impact of the travel restrictions on Alitalia
(19) The measures adopted to contain the COVID-19 outbreak negatively affected the
European aviation sector, impairing airlines’ operations significantly. Estimates
by Eurocontrol show a significant decrease in flights between 9 March and 1 July
2020, between a minimum of 14% (on 9 March 2020) and a maximum of 93%
21
Decree-Law of 16 May 2020, No 33, ‘Ulteriori misure urgenti per fronteggiare l'emergenza
epidemiologica da COVID-19’.
22 Decree of the Prime Minister of 11 June 2020, “Ulteriori disposizioni attuative del decreto-legge 25
marzo 2020, No 19, recante misure urgenti per fronteggiare l'emergenza epidemiologica da COVID-
19, e del decreto-legge 16 maggio 2020, No 33, recante ulteriori misure urgenti per fronteggiare
l'emergenza epidemiologica da COVID-19”.
23 Joint Decree of the Ministry of Infrastructure and Transports and Ministry of Health No 227 of 2 June
2020.
24 Joint Decree of the Ministry of Infrastructure and Transports and Ministry of Health No 245 of 14 June
2020.
25 This was the case on 10 June 2020 for Slovakia; on 13 June 2020 for Romania and Poland; 15 June
2020 for Austria, Belgium, Croatia, Finland, France, Germany, Greece, the Netherlands, Czechia and
Sweden; on 17 June 2020 for Bulgaria and on 21 June 2020 for Spain.
26 Communication of 11 June 2020 from the Commission to the European Parliament, the European
Council and the Council on the third assessment of the application of the temporary restriction on non-
essential travel to the EU, COM/2020/399 final.
6
(reached on 12 April 2020) in comparison to the number of flights operated on the
same dates in 2019.27
(20) According to Italy, Alitalia’s business activities were significantly affected by the
serious spread of the COVID-19 virus and by the disruptive effects that the virus
and the travel bans had on the air transport sector at European and world level,
causing a drastic reduction in the operating network and routes operated by the
company.
(21) Before the COVID-19 outbreak, Alitalia operated a fleet of 95 planes with flights
to 102 destinations. In February 2020, the rapid spread of the COVID-19
pandemic and the adoption of the first governmental restrictions started to affect
Alitalia’s operations substantially. Between 16 February and 10 March 2020, the
total number of passengers transported by Alitalia decreased by almost 60%
compared to the same period in 2019.28
(22) From 21 February 2020 onwards, Alitalia’s net ticket sales (sales minus refunds)
also strongly decreased compared to those of the previous year, as shown by
Graphic 1 :
Graphic 1
[…]
Source: Alitalia
(23) The net value of sales decreased from EUR […] million on 21 February 2020
down to EUR […] million (-83.33%) on 1 March 2020 and turned negative on 10
March 2020. In particular between 1 and 10 March 2020, the daily variation of
the net sales compared to the same period in 2019 decreased considerably (-95%)
as shown by Table 1:
Table 1
[…]
Source: Alitalia
(24) According to the Italian authorities, the general lockdown measures had a severe
impact on Alitalia’s activities since their adoption between March and June 2020.
Table 2 shows the significant reduction of Alitalia’s flight operations since March
2020:
27
Eurocontrol - COVID19 Impact on European Air Traffic – Comprehensive Assessment. Air Traffic
situation for Wednesday 1 July 2020 compared with equivalent period in 2019. Available at:
https://www.eurocontrol.int/publication/eurocontrol-comprehensive-assessment-covid-19s-impact-
european-air-traffic
28 During the three weeks between 16 February and 10 March 2020, Alitalia transported respectively
[300 000-400 000], [200 000 – 300 000] and [200 000 – 300 000] passengers. For the same period in
2019, Alitalia transported respectively [300 000 – 400 000], [300 000 – 400 000] and [500 000 – 600
000] passengers. Alitalia’s load factor went down from […]% in the second-last week of February
2020 to […]% in the last week of February and […]% in the first week of March, i.e. below the
industry-standard of 70% above which a route is considered to be profitable.
7
Table 2: Alitalia’s flight operations (January-June 2020)
2020 Alitalia Jan Feb Mar Apr May Jun
Block Hours (000) [30-40]
[20-
30]
[10-
20]
[0-
10] [0-10]
[0-
10]
Departures (000) 15.0 13.7 5.5 1.7 2.1 3.0
Seats (mln) [2-5] [2-5] [0-3] [0-3] [0-3] [0-3]
Flying Fleet [90-100]
[90-
100]
[50-
60]
[20-
30]
[20-
30]
[20-
30]
Avg. Daily Util. (BH/Flying Fleet) […] […] […] […] […] […]
Number of routes 102 99 98 24 23 32
Source: Alitalia
(25) Alitalia’s flights operations for January-June 2020 starkly contrast with those
registered for the same period in 2019, as shown by Table 3:
Table 3: Evolution of Alitalia’s flight operations between January-June 2019 and January-June 2020
Diff.% 2020 vs. 2019 Jan Feb Mar Apr May Jun
Block Hours (000) -7% -4% -62% -90% -91% -89%
Departures (000) -4% -3% -63% -89% -87% -83%
Seats mln -4% -4% -62% -89% -86% -86%
Flying Fleet -4% -4% -40% -73% -77% -75%
Avg. Daily Util. (BH/Flying
Fleet) -3% -4% -36% -65% -59% -54%
Number of routes 0% -1% -7% -77% -79% -75%
Source: Alitalia
(26) Due to the COVID-19 outbreak and the travel bans imposed by the competent
authorities, Alitalia parked up to [40-50]% of its fleet in March 2020, [70-80]% in
April 2020, [70-80]% in May 2020 and [70-80]% in June 2020. In addition to the
grounding of most of its fleet during the period from March to June 2020, Alitalia
operated on requests from the crisis unit of the Italian Ministry of Foreign Affairs
a large number of special repatriation flights, in many cases from countries and
airports not included in Alitalia’s previous network.29
Between March and June
29
See for example http://corporate.alitalia.it/en/media/press-releases-sai/2020-03-20.html.
8
2020, Alitalia operated a total of […] special flights, in addition to the minimum
daily flights maintained to ensure essential services on domestic routes.
(27) Based on the traffic figures provided by Italy for the period from 1 March to 30
June 2020, Alitalia recorded a steep decline in passenger traffic as compared to
the same period in 2019.30
Table 4 shows that significant traffic reduction by
comparing the Available Seat Kilometre (ASK),31
Revenue per Available Seat
Kilometres (RASK),32
Revenue Passenger Kilometre (RPK)33
and Seat Load
Factor (SLF)34
figures of Alitalia for the period between March and June 2020
with those for the same period in 2019.
Table 4: Alitalia’s ASK, RASK, RPK and SLF, figures for March– June 2020
March 2020 2019
ASK (billions) […] […[ [58%]
RASK (EUR cent) […] […] [44%]
RPK (billions) […] […] [76%]
SLF […] […] [42%]
April 2020 2019
ASK (billions) […] […] [92%]
RASK (EUR cent) […] […] [62%]
RPK (billions) […] […] [98%]
SLF […] […] [74%]
May 2020 2019
ASK (billions) […] […] [94%]
RASK (EUR cent) […] […] [32%]
30
The number of passengers transported by Alitalia decreased by 80% in March 2020, 97% in April
2020, 95% in May 2020 and 87% in June 2020 compared to the same months in 2019.
31 Available seat kilometre (ASK) is a measure of an airplane's carrying capacity available to generate
revenues. It refers to how many seat kilometres are actually available for purchase on an airline. Seat
kilometres are calculated by multiplying the number of kilometres that a given airplane will be flying
on a route by the number of seats available on that airplane. ASK can be used to assess how efficient
an airline is at generating revenues from the availability of seats to customers. Thus the airline operates
at below capacity if all the seats on the plane are not sold.
32 The revenue per available seat kilometre (RASK) measures the total operating revenue an airline
generates per seat (empty or full) per kilometre flown. That indicator gives relevant information on the
financial performance and efficiency of an airline as it includes all operating revenues (baggage fees,
reservation change fees, inflight meals, etc.). In theory, the higher the RASK, the more profitable the
airline.
33 The revenue passenger kilometre (RPK) shows the number of kilometre travelled by paying
passengers. It is calculated by multiplying the number of paying passengers by the distance travelled.
For example, an airplane with 100 passengers that flies 250 kilometres has generated 25.000 RPK.
34 The seat load factor (SLF) is an airline industry metric that measures how much of an airline’s
passenger carrying capacity is used. It is a percentage indicating how effective the airline is at selling
seats and earning revenues.
9
RPK (billions) […] […] [98%]
SLF […] […] [69%]
June 2020 2019
ASK (billions) […] […] [94%]
RASK (EUR cent) […] […] 49%
RPK (billions) […] […] [95%]
SLF […] […] [23%] Source: Alitalia.
(28) The offering of Alitalia (ASK) in March 2020 was at 45% of pre-crisis level
(January 2020) and at 58% of the level of March 2019. The offering decreased by
94% in May and June 2020 compared to the same period in 2019. In parallel, the
RPK drastically decreased from […] billion in January 2020 to […] billion in
May 2020 (98% decrease compared to May 2019), as a consequence of both a fall
in revenues and in the number of kilometres flown.35
Hence, Alitalia registered
very low SLF figures between March and June 2020 with an average SLF of
[…]% during that period compared to […]% on the same period in 2019.
(29) According to Italy, as of 3 June 2020, despite the lifting of lockdown restrictions
and the partial reopening of air services in Italy, Alitalia’s activities were still low
as compared to February 2020 and the previous year. In particular, the ongoing
closure of many airports in Italy, such as Milan Linate,36
as well as the borders
restrictions still in place in the rest of the Union and with third countries forced
Alitalia to maintain a low level of activity. The net sales registered by the
company between 3 and 15 June 2020 decreased by 80.5% compared to the same
period in 2019.37
(30) Table 5 gives an overview of Alitalia’s flights operations during the period
running from 3 to 15 June 2020 compared to the same period in 2019:
Table 5
Intercontinental International National Total
variation
Departures -98,6% -91,8% -78,5% -84,3%
35
Alitalia continued to operate special flights throughout the crisis so that the number of kilometres
decreased to a lesser extent than the revenues generated per passenger.
36 Alitalia has a secondary hub in Milan Linate where it serves mostly domestic flights. Milan Linate
reopened on 13 July 2020.
37 Alitalia registered EUR […] of net sales against EUR […] in 2019. The company also registered EUR
[…] of total sales, which was 73.4% less than in 2019.
10
Seats
offered -99,3% -94,2% -84,6% -89,2%
Passengers
transported -99,4% -94,4% -83,2% -88,8%
Routes
operated -17 -55 -22 -94
Source: Alitalia
(31) According to Italy, the immediate post-lockdown period hugely affected Alitalia’s
operations, and particularly intercontinental and international flights because,
despite the lifting of the lockdown in Italy, most foreign countries, including most
Member States, continued to apply limitations to air transport, which de facto
forced most of Alitalia’s fleet to be grounded until at least 15 June 2020.
2.2. National legal basis
(32) The legal basis for the aid measure is Article 79(1) and (2) of Decree-law No 18
of 17 March 2020. A joint ministerial decree adopted by the Ministry of
Economic Development, the Ministry of Economy and Finance and the Ministry
of Infrastructure and Transport will lay down the detailed arrangements for the
application of that provision.
(33) On 14 August 2020, the Italian authorities adopted the Decree-Law No 10438
(the
‘August decree’) allowing the Ministry of Infrastructure and Transport to grant
aid in the form of a direct grant up to EUR 250 million to companies meeting the
eligibility conditions established by Decree-Law of 17 March 2020 to receive
compensation under the fund, and which requested or will request the aid. The
August Decree aimed at preserving the continuity of the air services in the context
of the COVID-19 outbreak, pending the outcome of a notification procedure
before the European Commission.39
2.3. Form and budget of the measure
(34) The measure will take the form of a grant. The budget is set at EUR 199.45
million and is to be paid from the general budget of the Italian State.
(35) Italy confirms that the notified aid to Alitalia will be net of any amount recovered
by insurance, litigation, arbitration or other source for the same damage. If the aid
is paid out before such amounts have been established and paid, Italy will recover
38
Decree-Law of 14 August 2020, No 104 ‘Misure urgenti per il sostegno e il rilancio dell'economia’.
39 The August Decree refers to a pending notification concerning compensation to be paid under the fund
set up to compensate airlines under Article 79(2) of Decree-Law of 17 March 2020. The Commission
observes however that Italy only notified an aid to Alitalia; there is no pending notification procedure
concerning compensation to be paid under the fund at the time of adoption of the present decision.
11
an amount corresponding to such compensations from the beneficiary in a second
step.
2.4. Administration of the measure
(36) The measure will be managed by the Ministry of the Economic Development, the
Ministry of Economy and Finance and the Ministry of Infrastructure and
Transport.
2.5. Beneficiary
(37) The beneficiary of the measure is Alitalia Società Aerea Italiana SpA.
(38) In May 2017, Alitalia - Società Aerea Italiana S.p.A. and its wholly owned
subsidiary Alitalia Cityliner S.p.A. were placed in extraordinary administration
pursuant to national insolvency legislation by decrees of the Italian Ministry of
Economic Development respectively of 2 and 12 May 2017. They were declared
insolvent by judgment by the Court of Civitavecchia on 11 and 26 May 2017.
(39) At the date of the adoption of the present decision, Alitalia and Alitalia Cityliner
S.p.A. are subject of two formal investigation proceedings by the Commission.40
(40) Alitalia is a major network airline operating in Italy. Before the COVID-19
outbreak, Alitalia served more than 100 destinations all over the world, carrying
over 21 million passengers from its main hub at Rome Fiumicino and other
airports in Italy. Alitalia is one of the largest Italian employer with over 11,000
employees.
2.6. Eligible costs and modalities for compensation
(41) Italy proposed two different approaches to assess the eligible costs.
2.6.1. The net losses methodology
(42) According to Italy, the eligible costs correspond to the damages directly suffered
by Alitalia during the period running from 1 March until 15 June 2020.41
Italy
defines the damages as the net losses due to the containment measures taken by
governments as a consequence of the COVID-19 outbreak.
(43) The net losses in that period are quantified as the difference between the
profit/loss incurred between 1 March and 15 June 2020 and those incurred during
the same period in 2019. That calculation takes into account the following
elements:
40
See State aid SA.48171 (2018/C) (ex 2018/NN, ex 2017/FC) — Alleged State aid in favour of Alitalia
(published in the OJ on 20.07.2018, JOCE C/256/2018) and State aid SA.55678 - New loan to Alitalia
(not yet published in the Official Journal).
41 Italy indicated that it is likely that Alitalia will incur losses caused by the COVID-19 outbreak also in
subsequent periods (i.e. as from 15 June 2020, when Alitalia resumed parts of its flight operation, until
at least the end of 2020).
12
(a) loss of revenue: a review of the impact of the containment measures taken
by governments as a consequence of the COVID-19 outbreak on total
revenue, including (i) fare revenues from tickets (tickets which could not
be sold), and (ii) additional / accessory revenues (seat reservation,
upgrades);
(b) additional and avoided costs: a review of Alitalia’s cost base and the
impact (both positive and negative) of the containment measures taken by
governments as a consequence of the COVID-19 outbreak on variable
costs, including deviation in (i) all variable costs (in particular fuel costs,
fees and charges, maintenance costs, IATA commissions and catering
costs), (ii) fixed costs which varied due to the containment measures taken
by governments as a consequence of the COVID-19 outbreak (in
particular lower personnel costs and marketing costs). Costs items do not
include any refund (effectively paid or to be paid).
(44) The Italian authorities explained that, given its extraordinary administration since
2017, Alitalia is not required to comply with standard accounting rules.42
Consequently, to establish the net losses, Alitalia submitted an ad hoc list of all
revenues and costs related to flight activities and detailed them item per item on a
monthly basis, both for the period from 1 March to 15 June 2020 and the same
period in 2019.43
The auditing firm PriceWaterhouseCoopers S.A certified
Alitalia’s damage calculation.
(45) On that basis, by comparing revenues and costs of the period from 1 March to 15
June 2020 with the same period in 2019, the Italian authorities calculated
Alitalia’s net losses due to the COVID-19 outbreak and the travel restrictions at
EUR 211.85 million.
2.6.2. The EBITDA44
methodology
(46) Italy proposed another evaluation of the damages directly suffered by Alitalia due
to the COVID-19 outbreak by comparing the EBITDA figures of Alitalia for 1
March to 30 June 2020 to the same period in 2019.45
According to that
42
Art. 61 of Decree-Law of 8 July 1999, No 270, “Nuova disciplina dell'amministrazione straordinaria
delle grandi imprese in stato di insolvenza, a norma dell'articolo 1 della legge 30 luglio 1998, n. 274”
and Art. 205 of Royal Decree of 16 March 1942, No 267, ‘Disciplina del fallimento, del concordato
preventivo, dell'amministrazione controllata e della liquidazione coatta amministrativa’ (Insolvency
Law).
43 Italy submitted the list of revenues and costs monthly generated between March and June 2020 as well
as for the same period in 2019. During that period in 2020, Alitalia registered a total net loss of EUR
254 million. To limit the calculation of the damages to 15 June 2020, Italy deducted the minor
revenues of the second half of the month (16-30 June) calculated on a daily basis from the overall
amount. As for the costs, Italy was not in a position to apply the same methodology, since the relevant
data were only available on a monthly basis. The minor costs incurred in the month of June 2020 have
been, thus, divided on a 50/50 basis and deducted accordingly from the overall amount calculated.
44 EBITDA stands for earnings before interest, taxes, depreciation and amortisation.
45 Italy also provided EBIT data. However, depreciations and amortizations in Alitalia’s 2019 accounts
show a significant degree of volatility, reflecting accounting issues rather than the underlying
economic evolution of the asset base. As a consequence, very large depreciations and amortizations
attributed to March 2019 would lead to an underestimation of Alitalia’s net losses in March 2020.
13
methodology, the estimated net losses registered between March and June 2020
amounted to EUR 232.26 million compared to the corresponding period in 2019,
as shown by Table 6:
Table 6: Alitalia’s EBITDA from March to June 2020 vs. 2019 (EUR million)
March April May June March-June
EBITDA 2019 […] […] […] […] [50-80]
EBITDA 2020 […] […] […] […] [(150) (180)]
Net losses -90,02 -41,21 -35,41 -65,62 -232,26
(47) Italy then further adjusted the calculation of the damages to the period from 1
March to 15 June 2020. Since no daily EBITDA data were available, Italy
allocated 50% of the net losses suffered in June 2020 compared to June 2019 to
the first half of the month.
(48) Thus, on the basis of the EBITDA comparison between 2019 and 2020, the total
net losses of Alitalia due to the COVID-19 outbreak between 1 March and 15
June 2020 are estimated at EUR 199.45 million compared to the corresponding
period in 2019, as shown by Table 7:
Table 7: Alitalia’s EBITDA from 1 March to 15 June 2020 vs. 2019 (EUR million)
March April May 1-15 June 1 March - 15
June
Net losses -90,02 -41,21 -35,41 -32,81 -199,45
2.7. Cumulation
(49) The Italian authorities confirm that the aid cannot be cumulated with other aid
(also de minimis) covering the same eligible costs.
2.8. Commitments
(50) Italy commits to define in the ministerial decree referred to in Article 79(2) of
Decree Law No 18 of 17 March 2020, the methodology for calculating the
damages suffered by Alitalia from 1 March to 15 June. The methodology will
allow to calculate the net losses (defined as the loss of revenues minus avoided
costs) assessed in comparison with the year prior to the exceptional occurrence.
Italy will apply that methodology in compliance with the international
EBITDA data is instead immune to that effect and provides a more reliable base for damage
estimation.
14
accounting standards, commonly used for the formulation of EBITDA, to the
extent they are applicable to companies under extraordinary administration.
3. ASSESSMENT
3.1. Legality of the measure
(51) Pursuant to Article 108(3) TFEU, when the Commission has been notified of
plans to grant aid, the Member State concerned must not grant the aid until the
Commission adopted a decision approving that aid (“the standstill obligation”).
(52) According to Article 79(1) and (2) of Decree-Law No 18 of 17 March 2020, the
granting of the aid to compensate airlines that meet the eligibility criteria to
benefit from compensation under the fund46
for damages suffered due to the
COVID-19 pandemic is subject to the prior authorisation of the Commission.
(53) On 14 August 2020, as stated in recital (33), Italy adopted the August Decree
authorising the Ministry of Economic Development to provide advance payment
in the form of a direct grant of up to EUR 250 million to airlines that qualify for
such compensation from the fund. Since it is an act conferring the right to receive
the aid from the State budget, the Italian authorities adopted a legally binding act
by which they undertook to grant the aid to any beneficiary of the fund that has
requested or will request it, including Alitalia.47
On the basis of the August
Decree, an advance payment can be granted upon request of the beneficiary.
(54) It follows that the Italian authorities granted the measure in breach of the
standstill obligation. The measure is therefore illegal under Article 108(3) TFEU.
3.2. Existence of State aid
(55) Article 107(1) TFEU defines State aid as 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.
(56) For a measure to be categorised as aid within the meaning of
Article 107(1) TFEU, all the conditions set out in that provision must be fulfilled.
First, the measure must be imputable to the State and financed through State
resources. Second, it must confer an advantage on its recipients. Third, that
advantage must be selective in nature. Fourth, the measure must distort or
threaten to distort competition and affect trade between Member States.
(57) The measure is imputable to the State, since it is administered by the Ministry of
the Economic Development, the Ministry of Economy and Finance and the
Ministry of Infrastructure and Transport. It is financed through State resources,
since the measure will be paid out from the general budget of the State.
46
See recital (3).
47 See judgment of 14 January 2004, Fleuren Compost v Commission, Case T-109/01, EU:T:2004:4,
paragraph 74.
15
(58) The measure confers an advantage on Alitalia in the form of a grant. No market
operator would provide a grant to Alitalia. The measure thus relieves the
beneficiary of costs that it would have had to bear under normal market
conditions.
(59) The measure is selective, since it is granted to Alitalia as opposed to other airlines
that do not fulfil the eligibility requirements to benefit from the fund. Equally, the
measure is selective in that the fund from which Alitalia receives compensation is
only open to the aviation sector.
(60) The measure is liable to distort competition, since it strengthens the competitive
position of Alitalia. It also affects trade between Member States, since Alitalia is
active in the aviation sector, in which intra-Union trade exists.
(61) In view of the above, the Commission concludes that the measure constitutes aid
within the meaning of Article 107(1) TFEU. The Italian authorities do not contest
that conclusion.
3.3. Compatibility
(62) Article 107(2)(b) TFEU covers aid which is, in law, compatible with the internal
market, provided that it satisfies certain objective criteria. Since this is an
exception to the general principle stated in Article 107(1) TFEU that State aid is
incompatible with the internal market, Article 107(2)(b) TFEU must be
interpreted narrowly. Therefore, only damage caused by natural disasters or
exceptional occurrences may be compensated for under that provision. There
must be a direct link between the damage suffered by an undertaking and the
exceptional occurrence, and the compensation must not exceed the amount of
damage.
(63) Where those criteria are satisfied, the Commission is bound to declare such aid
compatible with the internal market, and it has no discretion in that regard.
Therefore, the existence of two formal investigation procedures in respect of
previous measures granted to Alitalia ongoing at the time of adoption of the
present decision (see recital (40)) does not preclude the Italian authorities from
granting aid under Article 107(2)(b) TFEU.
3.3.1. The notion of exceptional occurrences with the meaning of Article
107(2)(b) TFEU
(64) Article 107(2)(b) TFEU provides that aid to make good damage caused by natural
disasters or exceptional occurrences shall be compatible with the internal market.
Neither the TFEU nor Union legislation contains a precise definition of the notion
of exceptional occurrence. As they constitute exceptions to the general
prohibition of State aid within the internal market laid down in
Article 107(1) TFEU, the Commission, in line with the consolidated Union case-
law48
has consistently held that the notions of ‘natural disaster’ and ‘exceptional
48
Judgment of the Court of Justice of 11 November 2004, Spain v Commission, C-73/03,
EU:C:2004:711, paragraph 37 and judgment of the Court of Justice of 23 February 2006, Atzeni and
others, in Joined Cases C-346/03 and C-529/03, EU:C:2006:130 paragraph 79.
16
occurrence’ referred to in Article 107(2)(b) TFEU must be interpreted
restrictively.
(65) The characterisation of an event as being an exceptional occurrence is made by
the Commission on a case-by-case basis, having regard to its previous practice in
the field.49
In that regard, the following indicators relating to the event concerned
must be cumulatively met: (i) unforeseeable or difficult to foresee;50
(ii)
significant scale/economic impact51
and (iii) extraordinary, i.e. differ sharply from
the conditions under which the market normally operates.52
3.3.2. COVID-19 outbreak as an exceptional occurrence
(66) Following the first reports of cases of acute respiratory syndrome (COVID-19) in
the Wuhan municipality in China at the end of December 2019, the Chinese
authorities identified a novel coronavirus (SARS-CoV-2) as the main causative
agent, which had not been previously identified in humans. The outbreak rapidly
evolved, affecting not only other parts of China but has also spread to the
majority of countries worldwide, including all Member States. Outbreaks of novel
virus infections among people are always a public health concern and can have a
significant economic impact. Specific sectors and areas are particularly affected
by the outbreak, be it because of national outbreak control measures, travel
restrictions or supply chain disruptions.
(67) The World Health Organization (“WHO”) warned about the very high risk that
COVID-19 would spread and have a global impact. The subsequent spread of
COVID-19 ultimately resulted in far-reaching disruption of various economic
49
Exceptional occurrences which have been accepted in the past by the Commission include war,
internal disturbances and strikes, and, with certain reservations and depending on their extent, major
industrial accidents which result in widespread economic loss, see Guidelines for State aid in the
agricultural and forestry sectors and in rural areas 2014 to 2020, paragraph 330 (OJ C 204, 1.07.2014,
p. 53).
50 Commission decision of 1 August 2008 in case SA.32163, Remediation of damage to airlines and
airports caused by seismic activity in Iceland and the volcanic ash in April 2010, Slovenia, paragraph
31, OJ C 135, 9.5.2012, p. 1.
51 Elements taken into account by the Commission to consider that the occurrence reached a significant
scale: negative consequences cannot be contained (Commission decision of 4 October 2000 in case
NN 62/2000, Régime temporaire d'aides aux entreprises victimes des intempéries et de la marée noire
– France, OJ C 127, 29.05.2003, p. 32), or the number of dead or injured people (Commission decision
of 11 April 2012 in case SA.33487, Agricultural and fisheries aid to compensate for damage due to
exceptional occurrence (red mud "Aluminium accident"), Hungary, paragraph 35, OJ C 120,
25.04.2012, p. 1; Commission decision of 2 May 2002 in case N241/2002, Régime en faveur des
entreprises victimes de la catastrophe industrielle de Toulouse, France, paragraph 19, OJ C 170,
16.07.2002, p. 16), the immense ecological and economic damage (Commission decision of 11 April
2012 in case SA.33487, paragraph 36, OJ C 120, 15.04.2012, p. 1), the amount of material damage,
despite the local character of the industrial accident (Commission decision of 2 May 2002 in case N
241/2002, paragraph 19, OJ C 170, 16.07.2002, p. 16).
52 In its decision of 19 May 2004 in case C-59/2001 (OJ L 62, 2007, p. 14), the Commission considered
that the (alleged) fall in sales of poultry meat in a Member State not directly affected by the dioxin
contamination did not in itself constitute an exceptional occurrence. Even though it was an
unforeseeable event, it formed part of the normal commercial risks to which an undertaking is
exposed.
17
sectors. That disruption was thus clearly outside the normal functioning of the
market. In order to avoid an exponential increase in the number of cases,
accompanied by social alarm and severe economic consequences, containment
measures needed to be adopted.
(68) On 11 March 2020, the WHO characterised the COVID-19 disease as a
pandemic. The public health risk deriving from the absence of therapeutics or
vaccines for the novel COVID-19 virus determined the exceptionality of the
circumstances. The rapidity of the spread caused enormous consequences both in
terms of fatal outcomes in high-risk groups and in terms of economic and societal
disruption.53
The necessity to adopt and encourage the respect of measures aimed
at interrupting transmission chains stemmed from that acknowledgement.
(69) Since March 2020, Member States adopted various measures that aimed to limit
the spread of the coronavirus, e.g. travel restrictions for non-essential travels,
closure of borders, closure of non-essential shops, obligation for companies to
organise working from home for every position where this is possible and various
social distancing measures.
(70) In view of the above, the COVID-19 outbreak qualifies as an exceptional
occurrence, as it was not foreseeable and is clearly distinguishable from ordinary
events, by its character and its effects on the affected undertakings and the
economy in general, and therefore falls outside the normal functioning of the
market.
(71) In this context, the COVID-19 outbreak can be considered as an exceptional
occurrence within the meaning of Article 107(2)(b) TFEU.54
3.3.3. Causal link between the damage to be compensated by the notified
measure and the COVID-19 outbreak
(72) The Commission has examined the notified measure pursuant to Article 107(2)(b)
TFEU, which requires a direct link between the damage and the exceptional
occurrence for which the State aid measure provides compensation. That
assessment has led to the following observations.
(73) As described in detail in section 2.1.1, the COVID-19 outbreak has resulted in
travel restrictions all over the world and the closing down of the vast majority of
passenger air transport. Those containment measures were intended to avoid the
spread of the virus, but they negatively affected the aviation sector. The damage
suffered by Alitalia is directly linked to the COVID-19 outbreak through the
effects on the flights of Alitalia of the travel restrictions and other containment
53
ECDC’s Rapid Risk Assessment, Outbreak of novel Coronavirus disease 2019 (COVID-19): increase
transmission globally – fifth update, 2 March 2020.
54 See Commission Decision of 12 March 2020 in State aid case SA.56685 (2020/N) – Denmark –
Compensation scheme for cancellation of events related to COVID-19, OJ C 112, 03.04.2020, and
Commission Decision of 31 March 2020 in State aid case SA.56765 (2020/N) – France – COVID-19
Moratoire sur le paiement de taxes et redevances aéronautiques en faveur des entreprises de transport
public aérien sous licences d'exploitation délivrées par la France.
18
measures imposed by the Italian government and other governments around the
world.
(74) The notified measure aims at compensating Alitalia for the damage suffered due
to the cancellation of its flights as a result of the imposition of travel restrictions
and other containment measures linked to the COVID-19 outbreak (recital (3)).
For the calculation of the damage, the Italian authorities have considered the
reference period running from 1 March to 15 June 2020 (see section 2.1.1).
(75) The Commission considers that, for the purposes of calculating the damage
subject to possible compensation under Article 107(2)(b) TFEU, net losses
occurring during the national lockdown period (10 March to 2 June 2020) and the
days immediately before (1 to 9 March 2020) and after (3 to 15 June 2020) can be
considered as damage directly linked to the exceptional occurrence, as it will be
explained in sections 3.3.3.1 to 3.3.3.3.
3.3.3.1. Period from 1 to 9 March 2020
(76) As reported in recitals (8) to (11), Italy was one of the first Member States
severely affected by the COVID-19 outbreak and the adoption of governmental
restrictions, in particular since mid-February 2020.
(77) Since the end of February 2020, the Italian authorities adopted several measures
that considerably limited cultural, sport and school activities, and more generally
economic activities involving the gathering of people throughout the national
territory. This was the case in particular since 1 March 2020 with the adoption of
the Prime Minister’s decree referred to in recital (10) that substantially restricted
activities in Northern Italy and implemented health and sanitary measures on the
rest of the territory. Those restrictions were further reinforced for the whole
territory on 4 March 2020. In the meantime, other States either imposed travel
restrictions to Italy or published travel warnings for Italy between the end of
February and 9 March 2020.55
(78) Furthermore, the data provided by the Italian authorities clearly show that
Alitalia’s position strongly deteriorated in parallel to the governmental
restrictions put in place, with a sudden and substantial fall of ticket sales (see
Graphic 1) and passengers transported (fall of 60% in the space of three weeks)
between 21 February and 9 March (see recital (21)). Between 1 March and 9
March 2020, ticket sales registered an average decrease of 95%.
(79) Alitalia was further hampered from mitigating the steep decline in passenger
numbers in March 2020 due to the rule in Article 10 of Regulation (EC) No
95/93.56
According to that rule, where an airline possesses a slot at an airport, it
must use that slot for at least 80% of the scheduled flights for that slot’s use or
55
For example, on 24 February 2020 France and Belgium published their travel warnings to Italy (in
particular Northern Italy). The United States of America published travel warnings to Italy as of 28
February 2020. As regards the travel restrictions, Romania imposed for example travel restrictions to
Italy as of 2 March 2020; Austria did so on 6 March 2020.
56 Council Regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation of slots at
Community airports OJ L 14, 22.1.1993, p. 1.
19
risk losing that slot. Accordingly, between 1 and 9 March 2020, Alitalia was
unable to reduce flight operations to match the nearly 60% decline in passenger
numbers between 21 February and 9 March 2020. On 30 March 2020, the Union
amended Regulation No 95/93 to suspend the application of that rule.57
(80) Those indicators demonstrate that Alitalia’s activities were directly affected by
the COVID-19 outbreak and the restrictions already in place at the time
immediately preceding the full lockdown. Therefore, the Commission considers
that the period from 1 to 9 March 2020 can be included as part of the reference
period for the compensation.
3.3.3.2. Period from 10 March to 2 June 2020
(81) The Commission notes that in the period from 10 March to 2 June 2020 lockdown
measures were extensively and widely in force (see section 2.1.1) in Italy and
within the Union, translating into an extensive grounding of Alitalia’s fleet. Data
provided in recitals (24) to (27) confirm the impact of the restrictions on Alitalia’s
operations.
3.3.3.3. Period from 3 to 15 June 2020
(82) The Commission considers that, despite the lifting by Italy of the general
lockdown measures on 3 June 2020, Alitalia’s operations remained substantially
affected by the partial restrictions still in force at national and international levels
until 15 June 2020.
(83) First, domestic flights continued to be strongly limited by the ongoing closure by
Italy of a large number of Italian airports, including Milan Linate where Alitalia
has a secondary hub. In addition, Italy applied specific restrictions on some
internal routes, such as Sardinia. Italy thus continued to restrict partially air
services after 3 June 2020.
(84) Furthermore, as explained in recital (17), most Member States, following the
official advice of the Commission to maintain control measures in place until 15
June 2020,58
still kept their borders closed until mid-June, forcing Alitalia to keep
a large part of its fleet still grounded. Meanwhile Italian governmental restrictions
limited greatly travel to third countries (see recital (15)). Therefore, and as
confirmed by the company’s flights activities between 3 and 15 June 2020 (see
recital (31)), Alitalia could not operate normally in relation to international and
most European destinations, at least until 15 June 2020.
3.3.3.4. Conclusion on the direct link between the damage and the
exceptional event
(85) The Commission concludes that the notified measure aims to cover the net losses
of Alitalia caused by the suspension of flights as a direct effect of the COVID-19
57
Regulation (EU) 2020/459 of the European Parliament and of the Council of 30 March 2020 amending
Council Regulation (EEC) No 95/93 on common rules for the allocation of slots at Community
airports, OJ L 99, 31.3.2020, p. 1.
58 See recital (14).
20
outbreak and restrictions. Hence, there exists a direct causal link between the
damage suffered by Alitalia during the period from 1 March to 15 June 2020 and
the exceptional occurrence, i.e. the COVID-19 outbreak.
(86) That conclusion is without prejudice to an evaluation of further losses directly
caused by the COVID-19 outbreak that Alitalia may have suffered or still suffer
directly due to governmental containment measures and which Italy can prove are
directly linked to COVID-19 related containment measures. Should this be the
case, Italy can grant to Alitalia further aid aimed at covering that additional
damage, subject to the Commission’s prior assessment and authorisation.
3.3.4. Proportionality of the aid measure
(87) In order to be compatible with Article 107(2)(b) TFEU, the aid must be
proportional to the damage directly caused by the exceptional occurrence. Aid
must not result in over-compensation of damage; it should only make good the
damage caused by the exceptional occurrence.
(88) To ensure proportionality, it is necessary to analyse the assumptions and evidence
on which the calculation of damage for the factual scenario is based. In particular,
it is necessary to look at how the exceptional occurrence has actually and directly
affected the operations of Alitalia (e.g. Alitalia has been prevented from
operating) and what actual impact it has had on the costs and revenues of the
company.
(89) The damage to be compensated corresponds to the net loss, defined as loss of
revenue minus avoided costs. The loss of revenue is the difference between the
revenue that Alitalia would have expected during the period from 1 March to 15
June 2020, had the containment measures linked to the COVID-19 outbreak not
occurred, and the revenue that Alitalia has actually generated during the period
from 1 March to 15 June 2020. To approximate counterfactual revenues, actual
revenues for the same period of the previous year are used. Avoided costs
correspond to costs that Alitalia would have had during the period from 1 March
to 15 June 2020 if its activity had not been affected by the containment measures
linked to the COVID-19 outbreak, and that Alitalia did not have to bear as a result
of the cancelled operations (fuel, airport taxes, etc.). The avoided costs are
quantified by comparing the costs borne by Alitalia for the same period of the
previous year with the costs borne by the company during the period from 1
March to 15 June 2020.
(90) That quantification can be done by comparing the financial results from 1 March
to 15 June in 2020 and in the corresponding period of 2019. As stated in section
2.6.1, Italy assessed the overall net losses on the basis of a list of all flight-related
revenues minus all costs registered between 1 March and 15 June 2020,
evaluating the total net losses to EUR 211,85 million during that period compared
to the corresponding period in 2019 (taking into account avoided costs).
(91) The Italian authorities also submitted an evaluation of the damages on the basis of
a monthly EBITDA comparison for the period March-June 2020 and the same
period in 2019, which established the total net losses of Alitalia between 1 March
and 15 June 2020 at EUR 199.45 million (see section 2.6.2).
21
(92) The evalutation based on EBITDA data provided by the Italian authorities, which
provides a more conservative estimate of Alitalia’s net losses than the
methodology based on a list of flight-related revenues and costs. The Commission
therefore considers that the EBIDTDA data should be taken into account for the
purpose of the calculation of Alitalia’s net losses. Hence, the Commission notes
that based on that more conservative methodology, the compensation proposed by
the Italian authorities does not exceed the amount of damages suffered by
Alitalia.
(93) In light of the above, the Commission considers that the measure granted by Italy
to Alitalia under Article 107(2)(b) TFEU (i.e. a compensation of EUR 199.45
million) does not exceed the damage estimated to have been incurred by Alitalia
directly linked to the exceptional occurrence and the governmental restrictions.
The Commission therefore concludes that the notified measure of EUR 199.45
million provides for compensation that does not exceed what is necessary to make
good the damage.
(94) In view of the above, the Commission concludes that the measure is
proportionate.
3.3.5. Cumulation
(95) The Italian authorities have confirmed that the aid cannot be cumulated with other
aid (also de minimis) covering the same eligible costs.
4. CONCLUSION
The Commission regrets that Italy failed to meet its obligations under Article 108(3)
TFEU. Nevertheless, in light of the above, the Commission has decided not to raise
objections to the aid on the grounds that it is compatible with the internal market
pursuant to Article 107(2)(b) of the Treaty on the Functioning of the European Union.
If this letter contains confidential information which should not be disclosed to third
parties, please inform the Commission within fifteen working days of the date of receipt.
If the Commission does not receive a reasoned request by that deadline, you will be
deemed to agree to the disclosure to third parties and to the publication of the full text of
the letter in the authentic language on the Internet site:
http://ec.europa.eu/competition/elojade/isef/index.cfm.
Your request should be sent electronically to the following address:
European Commission,
Directorate-General for Competition
State Aid Greffe
B-1049 Brussels
Yours faithfully,
For the Commission
22
Margrethe VESTAGER
Executive Vice-President