The European Commission (EC) is to ask the Italian Government why Alitalia has failed to meet targets set as a condition of state aid payments.
A report on the restructuring of the airline says it has not reached goals demanded for profitability, cost reduction and workforce cuts.
The Italian flag-carrier, meanwhile, is still searching for a strategic partner, with the collapse of talks between British Airways and KLM having widened its options.
A report to European Union transport commissioner Loyola de Palacio from the UK's Lek Consulting says Alitalia has met only seven or eight of 10 requirements set in 1997 when the EC approved the airline's restructuring and an associated aid package.
While identifying Alitalia's failings, the report also admits that the carrier's task was made harder by the Kosovo war, which disrupted air traffic; teething problems at its new Milan Malpensa hub, and by rising fuel costs. Alitalia says it failed to hit some targets only because of accounting procedures.
The carrier is preparing a business plan as it searches for a partner. Until recently, Swissair and Air France were considered the only two serious candidates, with a few US carriers also interested, but the failure of the BA-KLM talks has changed the situation.
Swissair is believed to be talking again with BA, while some sources suggest the UK carrier could take "a serious look" at Alitalia. KLM may even reconsider its decision to walk away from Alitalia, and has again stressed that it blames the Italian Government - not the airline - for the schism.
Alitalia's choice could have a big impact on its fleet modernisation plans. The airline needs to replace around 100 McDonnell Douglas MD-80s, which are to be retired within four years, and at the time of the KLM alliance had been set to order Boeing Next Generation 737s, mirroring the Dutch airline's choice. Now that Alitalia is without a partner, Airbus is pushing to add A319s and maybe A318s to a current contract for A320s and A321s. Boeing is offering the 717.
Source: Flight International
