20 replies to this topic

[EmiratesPilot007]

Today Alitalia have unfortunately gone into administration due to staff outrage over new plans. These plans were brought in with Eithiad airways buying 38% share of the airline, after that Alitalia created a plan to make the airline profitable but included job losses and pay cuts. Staff refused and they have now gone into administration. The Italian government have given a $350,000,000 loan to keep the airline going for the next couple of months. Will someone buy or will they go under???

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[DWProski]

Alitalia is a zombie that keeps being alive... somehow. It's the time to die, finally.

[Maestro69]

It has been an ongoing saga at Alitalia for what, 10-15 years, in wanting to turn the company around, refocus on its core market, make FCO is primary hub and leave MXP, staff not willing to negotiate new contract which might of not lead Alitalia down this road all so long ago.

 

While i would not want Alitalia to disappear, unless serious and drastic action is taken, Alitalia wont have a future for much longer... not matter how much money you throw at it.

[Spyrosv]

As most government related airlines, Alitalia is going from bad to worse. It's finally time for an actual airline to buy out Alitalia. Etihad is a possible candidate I think.

[Avelo]

I don't consider Alitalia to be a true airline, but rather an ad-hoc "international branding machine" whose sole purpose is to promote Italian pride in the skies and nothing else. Sure, SOME of their product may be decent--but IMO it would be mostly due to Etihad's help. On short-haul flights you'd now be faced with a "pay for all extras" business model, and their staff service, according to various customer reviews on sites like Yelp, can best be described as perfunctory. And adding insult to injury, it seems Alitalia has faced what I call an eternal bankruptcy--not for years, not for decades, but for GENERATIONS. Alitalia is and has always been financially unstable, in need of cash, and plagued by strikes no matter how much money politicians spoon-feed it. Italy's flag carrier has been on critical life support ever since its inception during the Mussolini years, and to hear another report of Alitalia facing financial stress wouldn't seem surprising. Perhaps it may be time to write a novel--or even better, create a soap opera series--about Alitalia and its problems so the whole world can know how turbulent the airline's history has been then and now...

[X-Wing @Aliciousness]

As most government related airlines, Alitalia is going from bad to worse. It's finally time for an actual airline to buy out Alitalia. Etihad is a possible candidate I think.

 

Yeah I've got some news about Alitalia and Etihad...

[TNT88]

They should turn to LCC. Sell all those B777-200/-300ER. Keep some of the A330-200 and reconfigure it to all economy and premium economy.

 

Operate cheap flights out of Big cities and holiday destinations around Italy.

 

At least this time they could fill their their plane close to 100%. Obviously Full-service airlines doesn't work for Italy.

[Avelo]

They should turn to LCC. Sell all those B777-200/-300ER. Keep some of the A330-200 and reconfigure it to all economy and premium economy.

Operate cheap flights out of Big cities and holiday destinations around Italy.

At least this time they could fill their their plane close to 100%. Obviously Full-service airlines doesn't work for Italy.

That won't work, either. Europe already has too many airlines to support another entrant in either the LCC or legacy segments, and the continent is already one of the most overcrowded and cutthroat aviation markets in the world, just like the United States. The best thing Italy could do right now is get rid of Alitalia, period.

[Duncan]

Cues slow violin music.

https://youtu.be/v1mQT1u_45I

[TNT88]

That won't work, either. Europe already has too many airlines to support another entrant in either the LCC or legacy segments, and the continent is already one of the most overcrowded and cutthroat aviation markets in the world, just like the United States. The best thing Italy could do right now is get rid of Alitalia, period.

Not necessarily. Italy is one of the prime tourist destinations in Europe. Cities like Bari, Pescara, Rome, Lamezia, Venice, etc. have high demand for tourist that flew on LCC. Same goes for charters from Germany, UK, Scandinavian countries and Russia. The main priority is to turn the airlines to be profitable. Being an LCC is the only thing they haven't actually try.

 

As for the A330-200. Pretty obvious market, the Chinese and American tourist who's looking for saving bucks. B777-200ER and B777-300ER might be a bit too big. 

[Spyrosv]

It's official. The minister of development of Italy said in a radio broadcast that Alitalia will go on sale within 2 weeks time.

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[bAnderson]

I would think that the US legacies would be happy to hear of Alitalia's demise. Their Italian presence is already huge, but with almost no competition it could work very well.

[Avelo]

I would think that the US legacies would be happy to hear of Alitalia's demise. Their Italian presence is already huge, but with almost no competition it could work very well.

Alitalia's international presence remains relatively weak compared to other European flag carriers, so its impact on travelers would likely be minimal.

[Fransie]

There are rumors – although I am quite sceptical – that Lufthansa might buy it. However, I do believe that there is a huge probability that other airlines will prefer to buy its assets – mostly its good slots in major airports – even though the Italian government will try to preserve it and to sell it as "one". There are several elements that caused Alitalia's bad performance. First of all, in the ends of the 1990s and beginning of the 2000s it tried – stupidly – to focus on short and medium-haul flights which was a total failure because of the strong LCC – in particular Ryanair – entry and predation in the Italian market. Another major issue is (was) related to labour costs that were extremely high but have been reduced in the past years as long as high leasing and fuel costs. Furthermore, the management was not particularly good – even after Etihad bought 49% of it – since it ended up engaging more on cosmetic changes (livery, seats and so forth) and not strategic. That is, focusing more on the long-haul market. Only few and not particularly new wide-bodies have been add since Etihad's entry. However, one of the reason of its slow long-haul expansion was also caused by the joint venture with Air France-KLM and Delta that eventually was not so beneficial to Alitalia since it was signed when Alitalia was (again) in a difficult financial situation. This meant not being able to add route on the North American market and functioning more as a feeder to Air France-KLM. 

 

The new business plan was not bad since it tried to address most of the issues that I have above mentioned but unfortunately it was rejected by the workers. We will see what will happen since its bankruptcy may have deep negative effects on the aviation sector in Italy. 

[Avelo]

There are rumors – although I am quite sceptical – that Lufthansa might buy it. However, I do believe that there is a huge probability that other airlines will prefer to buy its assets – mostly its good slots in major airports – even though the Italian government will try to preserve it and to sell it as "one". There are several elements that caused Alitalia's bad performance. First of all, in the ends of the 1990s and beginning of the 2000s it tried – stupidly – to focus on short and medium-haul flights which was a total failure because of the strong LCC – in particular Ryanair – entry and predation in the Italian market. Another major issue is (was) related to labour costs that were extremely high but have been reduced in the past years as long as high leasing and fuel costs. Furthermore, the management was not particularly good – even after Etihad bought 49% of it – since it ended up engaging more on cosmetic changes (livery, seats and so forth) and not strategic. That is, focusing more on the long-haul market. Only few and not particularly new wide-bodies have been add since Etihad's entry. However, one of the reason of its slow long-haul expansion was also caused by the joint venture with Air France-KLM and Delta that eventually was not so beneficial to Alitalia since it was signed when Alitalia was (again) in a difficult financial situation. This meant not being able to add route on the North American market and functioning more as a feeder to Air France-KLM.

The new business plan was not bad since it tried to address most of the issues that I have above mentioned but unfortunately it was rejected by the workers. We will see what will happen since its bankruptcy may have deep negative effects on the aviation sector in Italy.

IMO Alitalia deserves to die, especially since a lot of Italians now hate their flag carrier. If you think otherwise, I would suggest Alitalia leave SkyTeam for good, if you're saying its joint venture with Delta and Air France-KLM (the more powerful members of SkyTeam) has prevented it from expanding its long haul operations.

[Maestro69]

IMO Alitalia deserves to die, especially since a lot of Italians now hate their flag carrier. If you think otherwise, I would suggest Alitalia leave SkyTeam for good, if you're saying its joint venture with Delta and Air France-KLM (the more powerful members of SkyTeam) has prevented it from expanding its long haul operations.

 

Well, you sure have something against Alitalia....

 

Anyways, i think another problem for Alitalia was focusing its operations around FCO instead of MXP, considering that Rome is mainly a tourist attraction, while Milan and most of Northern Italy, is where the main industrial and financial areas are and where perhaps they should of focused their operations, instead of just giving away that market to Lufthansa, Air France and others.

 

Whatever happens, either Alitalia is going to become a shell of its former self or just be let to die and another airline rise to take its place.

[zipp]

inb4 another Eastern Air Lines post on how the death of alitalia will trigger the need for a new carrier to service the northern gates of the Belize International Airport

[bostero2]

It really is a shame that Alitalia is always in financial trouble, it never was a great airline in respect to customer service and I think that reputation lasted a long time. Anyway, the italian government gave it a bridge loan of €600 million that should last it for a six month period of operations... And I seriously hope they resist that long at least (since I have a ticket booked with them for August with a return in September)... Anyway I don't really see a way out for Alitalia and not many would be interested in buying it whole since it's always been a black hole were whatever money you put in you loose. I would really be surprised if it survives again, if it finds another buyer. The only path for subsistence that I see for them is being bought once again from the Italian Government and I don't think that would happen neither that it would be good for either Alitalia nor Italy itself. I do believe that if Alitalia ends up disappearing another airline will rise up to take it's place though it would take decades...

[Fransie]

IMO Alitalia deserves to die, especially since a lot of Italians now hate their flag carrier. If you think otherwise, I would suggest Alitalia leave SkyTeam for good, if you're saying its joint venture with Delta and Air France-KLM (the more powerful members of SkyTeam) has prevented it from expanding its long haul operations.

 

I believe it is quite hard do determine if a company should "deserve to die" or not from a social and economic standpoint. If Alitalia bankrupts there are going to be severe consequences for several Italian airports – in particular the small ones and FCO – and it will take them several years to recover or they may even close down. Furthermore, job losses do not only regard the Alitalia staff but also all the businesses related to Alitalia such as cleaning services or catering. Therefore, one has also to take that into account. However, that does not mean that a continuously unprofitable company should be kept alive for ever. 

 

As for the joint venture with Air France-KLM, it has already been ended since January because of its non-beneficial effects on Alitalia. However, that does not mean that is has to leave SkyTeam since a joint venture and an alliance are quite different. 

 

 

Well, you sure have something against Alitalia....

 

Anyways, i think another problem for Alitalia was focusing its operations around FCO instead of MXP, considering that Rome is mainly a tourist attraction, while Milan and most of Northern Italy, is where the main industrial and financial areas are and where perhaps they should of focused their operations, instead of just giving away that market to Lufthansa, Air France and others.

 

Whatever happens, either Alitalia is going to become a shell of its former self or just be let to die and another airline rise to take its place.

You are right in mentioning MXP. However, I think that the issue was not focusing on FCO but rather not deciding whether to keep Milano LIN or enhance MXP. FCO all alone has slightly more traffic than all the three airports (MXP, LIN and Bergamo BGY) that "supply" Milan and part of the Northern regions. Moreover, it is not only a touristic city but also a capital. The issue was that when MXP was built it was too far away from Milan and badly connected to it and LIN was seen as more profitable. Furthermore, several workers – based in FCO – did not want to move to Milan. They should have decided with a clear strategy whether to abandon or better downsize LIN and make a long-term investment on MXP or just focus on LIN. Having two hubs (FCO and MXP) is possible but you need a strong and clear management plan which Alitalia never had. Nonetheless, I agree with your future predictions on Alitalia.

[Lord Corner]

I follow the german news by "aero.de" ander "aerotelegraph" as well as several news papers concerning alitalia. The CEO of Lufthansa clearly said many times that Lufthansa won't buy Alitalia in one piece. Lufthansa is only interested in slots or fleet fragments. Anyway it seems also that Lufthansa will take over Air Berlin until the end of the year which is causing enough business on its own.

 

Also the Italian Prime Minister stated several times that the government "won't buy Alitalia once more". The Moment I read that staff refused the rescue plan was a headshaker for me. Shortly after, Etihad Investment Manager left his place for a new one, also caused by the crisis of Air Berlin. Etihad announced that it wants to sell all shares of Air Berlin and I guess this is their attitude concerning Alitalia, too.

 

Nevertheless I just read that Alitalia expands its route network with several long haul destinations in the winter flight plan. I guess this is just strategy to show possible opportunities to potential buyers. Now Alitalia says it wants to Focus on Long-Haul.

 

Either way I'm with those who'd rather see the brand Alitalia sink into neverlands as for me the name was only a synonym for mismanagement, corruption and impoliteness. 

 

To the consequences for Italian aviation market:

 

easyJet and Ryanair stated that they both could base up to 10 aircraft by the end of the summer flight plan. Air France - KLM and IAG as well as Lufthansa and her group members stated that they would care for the long-haul routes of Alitalia.

 

The only gap left would be a reliable regional carrier, but Air Dolomiti and other weak carriers in Italy could be pushed up by the time Alitalia gives way for them.

 

I therefore would say that the main part of the Italian aviation market would recover within less than five years. Maybe the transition will even be nearly fluid.

 

We will see.