Talks between the European Union and Italy on a restructuring plan for Alitalia face a stumbling block as the European Commission demands the carrier give up a significant number of airport slots, three sources close to the matter said.

Brussels and Rome have been in talks since the beginning of this year over Italy’s plan to restructure the ailing airline through the launch of a new, state-owned company called ITA.

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Under Rome’s plan, ITA should take over the brand, the slots and part of the assets of the old carrier to start flying with a small fleet before the summer.

However, the nationalisation and injection of 3 billion euros ($3.53 billion) in taxpayers’ money into the new carrier need EU clearance, and a further delay in talks between Rome and Brussels could put at risk the Italian carrier’s summer season.

“That’s where the problem lies, in (Milan city airport) Linate’s slots,” one source with knowledge of the matter told Reuters.

Another source said the Commission is demanding a significant reduction in the slots that Alitalia would transfer to ITA, and said the ITA business plan has not been cleared yet by Brussels.

The European Commission declined to comment.

After meeting the EU competition chief Margrethe Vestager, the Italian ministers involved in Alitalia’s nationalisation reiterated a pledge to set up “a solid, sustainable and independent carrier,” they said in a statement.

The new airline should be able to “start operations as soon as possible in discontinuity with the old Alitalia,” the ministers said, adding a new meeting with Vestager would take place in the next few days.

ITA has until now rejected the idea of giving up slots at Milan city airport Linate, where Alitalia operated more than 50% of total slots before the pandemic hit.

Ryanair is interested in taking part in a tender to buy slots at Milan Linate airport and Rome Fiumicino airports if Alitalia puts them on the block, the Irish carrier said in January.

Germany’s Lufthansa, in return for a 9 billion euro bailout last year, reluctantly gave up 24 slots at each of its main hubs, Frankfurt and Munich.

($1 = 0.8488 euros)

(Reporting by Francesca Landini; Additional reporting by Foo Yun Chee in Brussels Editing by Susan Fenton and Richard Chang)

This article was written by Francesca Landini, Giuseppe Fonte and Angelo Amante from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

Photo Credit: The never-ending saga of Alitalia is not looking like it will conclude anytime soon, as a spat has emerged over forfeiting airport slots in Europe. Skift