Italy Set to Ramp Taxpayer Bill for Alitalia to $2.3 Billion

(Bloomberg) -- Italy is set to increase the taxpayer bill for keeping bankrupt airline Alitalia SpA aloft to more than 2.1 billion euros ($2.3 billion) over about three years, and the spending is unlikely to stop there.

A new 600 million-euro loan included in a coronavirus stimulus package being discussed by Prime Minister Giuseppe Conte’s cabinet, is part of a plan to re-nationalize the loss-making carrier, according to the latest draft of the document. That’s double what was initially planned, people familiar with the matter said on Saturday.

Italy’s efforts to keep the carrier flying while it sought partners to take it out of bankruptcy has already cost the taxpayer more than 2.1 billion euros. Widespread flight cancellations due to the virus threaten carriers across Europe, with much less revenue coming in from ticket sales to offset costs.

Over the past three years, attempts to re-launch Alitalia have failed to produce a viable deal. Possible partners have included Deutsche Lufthansa AG and Delta Airlines Inc. as well as state rail operator Ferrovie dello Stato Italiane SpA and infrastructure giant Atlantia SpA. The state injected 900 million euros into the airline in 2017 and approved a further 400 million euro loan in December. The state is also paying more than 200 million euros of interest on its debt.

To contact the reporters on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net;Alberto Brambilla in Rome at abrambilla8@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Ross Larsen, Karl Maier

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