Alitalia Should Fly Solo or Be Grounded: Ferdinando Giugliano

Take Alitalia, Italy‘s loss-making flag carrier, which has survived for years thanks to a string of public and private rescues. On Tuesday, the airline went into administration, prompting the government to provide a fresh loan worth 600 million euros ($655 million) to guarantee another six months of operation. Surely the time has come for Italy to stop losses. Unless Alitalia can find a buyer, the government should allow it to go bust.

Politically, that is a tall order, of course. Politicians want to protect workers, who stand to lose their jobs if a company shuts down. But every euro used in a bailout is one that can‘t be spent elsewhere; what economists call „opportunity cost.“ How many more jobs could have been created had the government invested 600 million euros into upgrading Italy‘s digital infrastructure?