The European Commission on Tuesday gave its definitive green light to the break up and sale of Italian national carrier Alitalia and the entry of Air France-KLM as a partner of the new private airline born from its ashes.
EU Transport Commissioner Antonio Tajani made the announcement after a report from a special monitoring trustee, appointed by the Italian government with the EC's approval, concluded that the operations which led to the creation of the new airline took place in accordance with market conditions and prices.
The operations included the sale of Alitalia's flight operations, name and brand to a specially created group of Italian investors - Compagnia Aerea Italiana (CAI) - as well as air France-KLM buying a 25% stake in the new carrier.
The EC had given its provisionary OK to the sale last November but hinged definitive approval to the repayment of a 300-million-euro bridge loan Italy gave the failing national carrier to keep it in the air while it was being sold.
According to Tajani, Italy resolved this issue with a plan presented to the EC last January.
The EC on Tuesday also gave its definitive green light to the privatization of the former Greek national airline Olympic Airways which had been linked to the repayment of unauthorized state aid as well.
''Today the market has two, new, totally private companies created without state aid, Tajani said.
Alitalia's profitable flight activities were able to be spun off and sold thanks to changes made to Italy's bankruptcy laws this past summer.
CAI paid 1.052 billion euros for Alitalia's flight division and key assets, including name and brand.
It then created a new private airline, using the old name, by merging Alitalia's operations with those of Air One, until then Italy's biggest private airline and a partner in CAI.
Close to 8,000 jobs were cut in the operation which created a more streamlined airline.
Just days before the 'new' Alitalia began operations, Air France-KLM agreed to invest 322 million euros for a 25% stake in the airline.
This made Air France-KLM the majority stockholder in Alitalia but it will not be able to buy the rest of the airline for a four-year period due to a lock-up clause in the CAI statute.
However, it can increase its stake in the event of a rights issue to recapitalize the airline.
The lock-up will become invalid should Alitalia be listed on the stock market.
Alitalia's other activities are currently being sold or liquidated to help pay for the national carrier's whopping debts of over two billion euros.
On Tuesday, the transport ministry approved the sale of the 'old' Alitalia's cargo activities.
