Italy will renationalize the struggling Alitalia airline after the coronavirus pandemic brought the carrier to its knees

• Italy will renationalize flag carrier Alitalia as part of a larger coronavirus-related economic rescue plan, Italian newspaper Il Messaggero reported, according to Reuters.
• The government had previously offered to sell the bankrupt airline, which has struggled for years. However, a buyer had not yet been found.
• The airline industry has been devastated by the global pandemic, with travel restrictions and decreased demand leading airlines to cut routes, reduce staff, and ground planes.
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The Italian government suggested on Monday that it would renationalize the bankrupt national carrier Alitalia, throwing a lifeline to the airline as coronavirus-related losses compound with preexisting financial difficulties.

Alitalia has struggled for several years amid heavy financial losses, and has been under special administration since investor airline Etihad pulled funding in 2017.

Italy announced the renationalization as part of a broad emergency economic rescue plan, which was outlined in a government decree published on Monday night, according to AFP and Italian media.

The pandemic will be formally recognized as a "natural disaster and exceptional event," according to FlightGlobal, which reports the decree states that, due to the widespread damage to the aviation sector, "public-service measures will compensate and allow the continuation of activities."

The assistance from the government, tied to the global pandemic, provides support that the airline may not have been able to secure otherwise. While it will continue to struggle due to decreased travel demand, travel restrictions, and suspended routes, the economic rescue offers at least a short-term reprieve.

The airline was previously offered for sale by the Italian government, with a deadline of May 31.

Heavy competition from low-cost carriers for flights within Europe has contributed to the airline's struggles, along with competition on long-haul routes from other larger airlines.

Air Italy, an essentially new airline that began operations in 2018, collapsed earlier this year due to financial pressures from high operating expenses, combined with a tight competitive environment and unsustainable expansion.

The upstart airline, which was partially owned by Qatar Airways, planned to compete with Rome-based Alitalia by basing its hub in Milan. The airline declared bankruptcy before the novel coronavirus became a full-fledged disaster for the aviation industry.