Police Arrest Executives From Italy's Collapsed Low-Cost Airline Volare

ROME (AP) -- Police have arrested three top executives for alleged fraud and other charges at collapsed Italian low-cost airline Volare Group, a prosecutor said Thursday.

Police arrested the group's founder and former chairman, Gino Zoccai, former CEO Vincenzo Soddu and former board member Giuliano Martinelli on charges of fraudulent bankruptcy, false accounting and embezzlement, said Antonio Pizzi, a prosecutor in the northern Italian town of Busto Arsizio.

Another former top executive, Mauro Gambaro, was placed under house arrest on the same charges, he said.

Authorities are still investigating dozens of other people in the case, Pizzi said.

Defense lawyers could not immediately be reached for comment.

Volare Group, founded in 1998 by a group of investors from the northeastern Italy's Veneto region, ran flights to 20 European destinations with a fleet of 24 planes.

The group, which employed some 1,400 people, grounded all of its planes last year because of financial problems and shortly after declared itself insolvent.

According to the prosecutor, among the operations that brought the airline to its euro500 million (US$646 million) collapse were the high-cost rental of aircraft from satellite companies managed by relatives of Volare administrators and the sale at bargain prices of air tickets to tour operators run by friends of the group's managers.

Italian news agency ANSA said that in June Volare, which was placed under bankruptcy protection, will start operating 12 daily domestic flights from Milan's Linate airport to the southern cities of Naples, Bari, Brindisi and Catania at the cost of euro40 (US$51.68) each way.

ANSA said that 530,000 passengers who had their flights canceled during the company's collapse will be able to purchase new tickets with a 50 percent discount.