The European Commission said today it was looking into a complaint that the Italian government ordered European airlines not to undercut the fares of its ailing state-owned air carrier Alitalia.
The Commission said it had written to all EU member states to gather more evidence and establish whether it needed to take action at EU level following the complaint from British Airways, although it was not certain whether Italy had a case to answer for.
"It is clearly a problem for the internal market," a Commission official told reporters after a daily news briefing.
"But today, we are not sure if we have a strong enough basis to make a case against Italy."
The EU executive earlier confirmed it had received a complaint from British Airways.
"The reply will be sent out in the next few weeks," Commission spokesman Mr Frederic Vincent told reporters at the briefing today.
But Vincent said BA had only complained in July about an Italian request to lift prices on the Rome-New York route. British Airways offers this route via London.
"What the Italian authorities are asking is for an increase in prices from Rome to New York," he said. "It's one ticket ... for Rome to New York, which British Airways was being asked about."
German airline Lufthansa has also said it was in talks with Italian authorities after being told to increase fares to match those of Alitalia.
But the German airline said it has not complained to the European Commission and hoped to resolve the issue through the talks in Rome.
Rome guaranteed a €400-million emergency loan to Italy's national carrier last month, the third time it has rescued Alitalia since 1997.
Direct competitors such as BA oppose state aid, saying it distorts competition.
Intra-EU flights are regulated by EU internal markets legislation, but this is not the case for routes that go beyond the bloc's territory.
Alitalia has lost at least 16 per cent of the domestic market since 2000 under pressure from newer, low-cost airlines.