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Shares suspended after Alitalia "illegal" loan report

Shares suspended after Alitalia "illegal" loan report
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All trading in Alitalia has been suspended by the Italian stock exchange after a newspaper reported that a government loan to keep the struggling airline flying might be against the law. La Repubblica claimed the European Commission has decided that the 300-million euros in emergency cash is illegal state aid, and must be withdrawn.

Pierluigi Bersani from the Democratic Party said: “Alitalia cannot seriously look at anything other than a big partnership with an international airline. I think the quick fixes announced by the government, in reality, are not on the table.”

The numbers are a nightmare. On a turnover of just under a billion euros in the first quarter of this year, Alitalia lost more than 200-million, and is 1.35 billion in debt. If the government loan is withdrawn, Alitalia will face the prospect bankruptcy.

The Association of European Airlines has complained to the European Commission. Ryanair called the government bridging finance “outrageous.” British Airways described it as unfair. But Italy’s finance minister stressed that in this case, the money was needed so Alitalia could be sold. The government has begun the third attempt in 18 months to sell the airline.