Alitalia (AZA, Rome Fiumicino) is to receive a EUR400 million euro (USD441 million) loan from the Italian government in order to keep the loss-making carrier in the air, after potential rescuers walked away from a deal last week.

Italian railway group Ferrovie dello Stato (FS), which was in talks with Delta Air Lines (DL, Atlanta Hartsfield Jackson) and infrastructure group Atlantia, said last week it was not able to form a rescue consortium for the flag carrier.

In a further development on November 26, Italy's Industry Minister Stefano Patuanelli told a parliamentary hearing that selling Alitalia to Ferrovie was no longer being considered. “We are discussing several options...for sure not the possibility of giving more time to the consortium...that option does not exist anymore.”

The Italian government had granted FS 12 months to present its recovery plan for Alitalia, but has now decided to appoint a new administrator and will release the EUR400 million euro (USD441 million) funds it had reserved for the carrier subject to the condition of receiving a binding offer.

According to sources speaking to Reuters, this condition has now been scrapped. The same sources also suggested that the Italian authorities are likely to anger European Commission officials by providing the cash to the ailing carrier, as the move flouts state aid rules.

“The industry ministry will ask the current administrators to quit to make room for a new administrator who will have the mandate to cut the carrier’s workforce and airplanes,” one of the sources said.

“Rome will use the appointment of a new administrator as a way to bypass EU state aid rules and grant an additional EUR400 million euros to Alitalia,” the source added.

Alitalia is no stranger to government bail-outs, having received EUR900 million euro (USD992 million) since May 2017, when the Skyteam carrier was put into special administration following a previous failed restructuring attempt. This amount, plus the EUR150 million euro (USD 165 million) interest are yet to be repaid by the airline. The total sum of tax payer's money that Alitalia is calculated to have been given is meant to be around EUR9 billion euro (USD10 billion).

When referring to the ch-aviation PRO airlines module the airline currently operates a fleet of 115 aircraft, the majority of which are leased. Its biggest base is Rome Fiumicino, where the company has 38% of weekly seats, followed by Milan Linate where the carrier has 15% of its weekly capacity.