The small airline started operations on Oct. 15 with less than half the fleet its predecessor Alitalia had and has seen Ryanair, Wizz Air and other budget rivals quickly gain market shares in its home turf.
"The competition is unfair ... we risk a blood bath if we try to regain market shares in airports where budget carriers enjoy incentives we don't have," ITA Airways Chairman Alfredo Altavilla told a parliament committee.
"We want the same incentives that are paid to low costs."
Altavilla said that in 2019 budget carriers received a total of almost nearly 400 million euros ($454 million) in subsidies from small airports competing against each other to attract foreign passengers.
In the same year Alitalia did not receive any incentives amid pressure from the government to connect small cities with its main hubs in Rome and Milan.
Speaking about Italy's large number of small airports, the former Fiat Chrysler manager also said that the country would have to consider banning short domestic flights to cut carbon dioxide emissions in the medium term.
The top manager said that ITA had posted a negative operating result of 170 million euros in the first two months and half to end-December and added job costs accounted for 14% of the total.
Altavilla added that, after the airline bought new aircraft from Airbus last year, the French group, in exchange, had committed to finding ways to increase its orders for aircraft components to be produced in Italy.
He added, however, that it would be up to Airbus and Italian aerospace group Leonardo - which produces components for the jetmaker - to discuss ways to translate the commitment into practice.
Altavilla dismissed as "speculation" a report in Italian daily la Repubblica saying that he had questioned the role of ITA Airways Chief Executive Fabio Lazzerini.
"The unity of purpose with Lazzerini has never been questioned," Altavilla said.
($1 = 0.8814 euros)
(Reporting by Francesca Landini; editing by David Evans)