The local government of Sardinia, an autonomous region in Italy, has launched an urgent tender to replace Alitalia (AZ, Rome Fiumicino) on territorial continuity routes to mainland Italy once the flag carrier goes out of business on October 14, 2021.

Having secured the approval of the Italian Ministry of Infrastructure and Transport as well as the European Commission, the regional authority requested proposals from 11 carriers that currently operate scheduled services in Italy namely Ryanair (which previously challenged the idea of subsiding flights between Sardinia and the mainland), easyJet, Volotea, Blue Air (Romania), Vueling Airlines, DAT, Blue Panorama Airlines, Neos, ITA - Italia Trasporto Aereo (Alitalia's successor which will launch operations on October 15), Air Malta, and Wizz Air. Smaller carriers operating in Italy, such as Tayaranjet, AlbaStar, or EGO Airways, were not invited.

ITA is formally a new company that cannot automatically assume any of Alitalia's assets or contracts. While it acquired some of its predecessor's aircraft and is expected to bid for its brand, the PSO contract is not tradeable and needs to be reallocated competitively.

The deadline for submissions was September 29, 2021. The initial contract will be awarded for just seven months under an emergency dispensation connected to Alitalia's closure.

The budget for this short-term contract is EUR37 million euros (USD43.2 million) and will cover the same routes as the current agreement, namely from each of Alghero, Cagliari, and Olbia in Sardinia to each of Milan Linate and Rome Fiumicino. In return, the carriers will have to offer discounted fares to all eligible residents of Sardinia without limit, up to the full capacity of the aircraft. Discounted fares to Rome will be capped at EUR39 (USD45.6) one-way, while flights to Milan will be restricted to EUR47 (USD54.9).

In line with the expected number of passengers, the services from Cagliari to Milan and Rome will be eligible for a maximum subsidy of EUR7 million (USD8.2 million) and EUR8.6 million (USD10 million), respectively, from Alghero - EUR3 million (USD3.5 million) and EUR5.7 million (USD6.7 million), and from Olbia - EUR3.5 million (USD4.1 million) and EUR5 million (USD5.8 million).

The government hopes the new operator(s) will assume all six routes on October 15 to avoid any break in scheduled services connecting Sardinia to the mainland.

During the seven-month interim solution, the authority plans to launch a permanent tender for the next two years with a tentative budget of EUR46 million (USD53.7 million).