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Monday, 18 October, 2004, 18:40 GMT 19:40 UK

Rome defends its aid to Alitalia

Alitalia plane The Italian government has rejected accusations that it is illegally aiding its state-controlled Alitalia airline.

Its comments come four days after the European Commission said it was looking at Rome's provision of a 400m euro ($495m; £275m) loan to the airline.

Italy's Industry Minister, Antonio Marzano, said the loan, which forms the core of Alitalia's restructuring plans, did not breach EU state-aid rules.

Alitalia plans to return itself to profit also include cutting 3,700 jobs.

"There isn't state aid, and, as for the rest of it, the European Commission will issue its judgment soon," said Mr Marzano.

Unhappy rivals

However, eight rival European airlines strongly disagree, and last week filled a letter of complaint to the European Commission, saying Alitalia's restructuring programme both violated state aid rules and threatened competition.

The letter's signatures included Germany's Lufthansa, British Airways and Spain's Iberia.

Guglielmo Epifani, head of Italy's largest union Cgil, accused the rival airlines of base opportunism.

"I get the impression that all of the national and international airlines have been hovering over Alitalia like vultures," he said.

"Now that it's saved, they're trying to wreck the work that's been done."

Alitalia lost 330m euros in 2003 as it struggled to get to grips with high costs, spiralling oil prices, competition from budget carriers and reduced demand.




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Related to this story:
EU studies Alitalia restructuring (14 Oct 04  |  Business )
Alitalia secures 400m euro loan (11 Oct 04  |  Business )
Staff layoff deal for Alitalia (06 Oct 04  |  Business )
Unions agree Alitalia pilot deal (15 Sep 04  |  Business )
Alitalia nears final union deal (24 Sep 04  |  Business )
Alitalia deal crosses last hurdle (18 Sep 04  |  Business )

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