(Adding EU Commission commentary)

MILAN, April 13 (Reuters) – Representatives of the Alitalia trade union on Tuesday urged the Italian government to cancel negotiations with Brussels over an overhaul of the airline, saying the European Commission favors foreign airlines over the group.

Rome has been negotiating with EU executives for months over Italy’s plans to restructure the airline through the launch of a new state-owned company called ITA.

Speaking before the Italian parliament, UILT trade union chairman Claudio Tarlazzi rejected the idea that the new company could accept the European Union’s proposal for restructuring.

“We have to realize that the EU is supporting rival companies, and negotiations (with Brussels) must stop and the company created with all the necessary assets,” Tarlazzi told members of the two parliamentary committees holding joint hearings.

Criticism of the EU’s handling of Alitalia peaked last week, when Brussels approved a French contribution to a 4 billion euro ($ 4.8 billion) support package for Air France-KLM in exchange for a 4% reduction in take-off and landing slots at Paris-Orly Airport.

A Commission spokesman said the looser rules for state aid adopted during the pandemic through the EU’s “interim framework” could not be applied to Alitalia.

“Alitalia was constantly losing money and was in trouble at the end of 2019, prior to the COVID-19 outbreak, and so was excluded from … receiving assistance under an interim framework,” the spokesperson told Reuters. .

“On the other hand, Air France and Lufthansa will have no difficulties at the end of 2019, which is why they can be recapitalized.”

The commission is in contact with the Italian authorities, he added, without elaborating.

The EU has asked ITA to abandon its Alitalia brand, give up half of its slot at Milan’s city airport, and start without the handling and maintenance division of the old airline, sources said.

ITA management has planned to seek partnerships with rival operators using the negotiating power of the Milan-Linate Alitalia airport slot as a sweetener.

It was supposed to buy some of Alitalia’s old assets using part of the 3 billion euros injected by the government, and started flying on fewer than 50 jets in June.

Representatives from three other unions who attended the hearing agreed with Tarlazzi and said the ITA should start by doubling down on its planned fleet.

Alitalia has posted operating losses annually since 2012, and more than half of its 11,000 employees have been temporarily laid off due to the coronavirus crisis.