Alitalia, along with its unit AirOne, is running a monopoly on the highly profitable Rome-Milan route and must give up some slots, Italy's antitrust authority said on Tuesday.
The authority, ending a probe that began last year, said the airline must give up slots between Rome Fiumicino and Milan Linate airports by October 28.
It did not say how many slots it had to relinquish but that the airline must open itself up to "effective competition" during peak hours in the early morning and late afternoon.
Alitalia is owned by CAI, a consortium of businessmen which bought the then-bankrupt airline in 2008. CAI is partly owned by Air France-KLM.