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Milan - Italy on Monday denied charges of protectionism over a plan for the postal service to help fund troubled airline Alitalia but British Airways' parent company IAG condemned it as "illegal aid".
On Tuesday Alitalia's shareholders approved the controversial plan for public Poste Italiane to contribute up
to €75m.
At the same meeting shareholders in Alitalia unanimous approved a capital increase boost of up to €300m, the company said on Tuesday.
Shareholders, including Air France-KLM which currently owns a 25% stake, now have 30 days starting on October 16 to decide whether or not they will subscribe to the new shares.
They also said banks Unicredit and Intesa Sanpaolo could take part for up to €100m.
Alitalia said its top executives intend to resign once the operation is completed.
The capital increase plan was put together in a hurry under pressure from the government, as energy major ENI threatened to ground the fleet by stopping fuel supplies because of unpaid debts.
The government said the plan does not preclude a tie-up between Alitalia and Air France-KLM and has asked the group to give its support even though its stake could be reduced to 10% to 11%.
Board approval allowed Alitalia to keep its regular schedule over the weekend, but sparked heated criticism in Italy over the intervention of a public company in the debt-laden airline.
"This is not protectionism but the exact opposite," a government source told AFP.
It is "a way of better accompanying Alitalia towards integration with a foreign partner."
But International Airlines Group (AIG), the parent of British Airways, Iberia and Vueling asked the European Commission to look into the issue.
"We have always been opposed to state aid. It's protectionist, undermines competition and favours failing airlines that have not got to grips with economic reality," IAG said in a statement.
"We would urge and expect the EU Commission to take interim measures to suspend this manifestly illegal aid," it said.
EU waiting
A spokesperson for the European Commission, Antoine Colombani, said that the EU's executive arm was waiting for the Italian authorities to notify it on the measures envisaged.
"We can't evaluate their compatibility with European rules on state aid until we have received this notification," Colombani told AFP.
But the Italian government plan was heavily criticised by the influential Financial Times which said that "Italy's new wave of protectionism risks scaring off investors."
It added that there were no obvious synergies between an airline and a postal service to justify the move.
Alitalia was already bailed out by taxpayers five years ago in a controversial government-steered operation that saw a large consortium of private Italian companies take a majority stake.
Transport Minister Maurizio Lupi on Sunday said that "the state has not and will not spend a single euro from the pockets of its citizens."
Lupi also said the proposed plan "would allow a company like this to negotiate with Air France without being in a position of weakness.
"The government will try, firstly with Air France, then with other international partners, to relaunch a strategic sector for us," he said.
An extraordinary Alitalia general meeting was under way late Monday to endorse the board's proposals.
Spanish daily La Stampa reported that Air France-KLM may attach conditions to its support for Rome's financing plan for Alitalia, including restructuring the airline's €1.2bn of debt and a change of strategy and board members.
