EU may oppose Alitalia loan without buyer: EU source
ROME (Reuters) - The European Commission may determine that Italy's 300 million euro ($466 million) loan for Alitalia is illegal state aid, if no bidder for the ailing carrier emerges first, an EU source said on Wednesday.
Italy's outgoing government approved the loan earlier this month to keep state-controlled Alitalia flying until a new buyer was found, after Air France-KLM yanked its bid for the loss-making carrier.
European Union rules prevent Italy from lending Alitalia any money unless Rome takes the same approach a private investor would in assessing the risk and setting the interest rate.
Additionally, the Commmission source, who declined to be named, said the loan might not make "rational" sense if there were no buyer to assure that the airline had a future. Alitalia is losing more than a million euros a day.
"If there isn't a buyer, even having the loan in market conditions isn't rational and therefore could be considered state aid," said the source, adding this position related to the EU's line on such issues and was not limited to Alitalia.
Rival airlines have said it would be unfair if Alitalia received government help while they undergo painful cuts to staff levels and other costs to cope with soaring fuel prices and weakening consumer spending.
