The announcement followed a breakthrough in talks between Italy and the European Commission after months of negotiations over how to make the new airline independent of the bankrupt Alitalia.

EU regulators wanted to ensure that the new carrier was fully separate from Alitalia, which received €1.3 billion in state funds between 2017 and 2019 to keep it operating.

ITA will have to buy Alitalia’s brand, aircraft and other assets in order to ensure that it is not just the same company by a different name, and therefore liable for Alitalia’s debts.

The economy ministry said that discussions with the Commission had resulted in a “constructive and balanced solution, which guarantees the discontinuity needed to comply with European law”.

The ministry confirmed that Alitalia will cease operations on October 15, the same day that its slimmed-down successor ITA becomes “fully operational”.

The new carrier will reportedly begin operations with an initial capital of €700 million which it will use to buy assets from Alitalia, with aims to break even by the third quarter of 2023. 

ITA will start off with a fleet of 52 planes, with the number of aircraft rising to 78 next year and reaching 105 by the end of 2025, reports Italian news agency ANSA.

It will employ fewer than 3000 people compared to the more than 11,000 who work for Alitalia currently, handing off ground operations and maintenance service to subsidiaries. 

ITA is more likely to look for niche routes that its low-cost competitors don’t cover, as well as offering long-haul flights and full onboard service. 

It has indicated it will make Rome Fiumicino its main international hub, with Milan Linate its second-biggest airport.

Its preliminary business plan includes 61 routes in 2021 to 45 different destinations, chiefly other European capitals including Paris, London, Amsterdam and Frankfurt.

It will also fly domestically between 21 airports in Italy, allowing people travelling to or from smaller airports such as Venice, Genoa, Verona, Florence, Naples and Bari to connect to international flights in Rome or Milan.

By 2025, the airline hopes to add nearly 30 new destinations, including Washington DC, Los Angeles, Sao Paolo and Buenos Aires.

Italy’s transport minister Enrico Giovannini said the new company would be competitive both nationally and internationally, and that it has “significant growth prospects”.

ITA is expected to start taking reservations in August.

The airline faces an uphill start thanks to a challenging economic situation caused by a general fall-off in air travel due to the COVID-19 pandemic.