Last Friday (29 August) Alitalia, the national airline of Italy, and after years of loss making, finally threw in the towel and called in an administrator.
Italian Prime Minister Silvio Berlusconi had earlier last week rushed through legislation that will allow Alitalia to draw off most of its unprofitable operations and debt into a new company that would eventually be liquidated. The move opens the way for a new Alitalia to be created, a combination of the existing viable parts of the operation, and Air One, a much smaller, but independent Italian airline. Air France ” KLM is said to be interested in involving itself in a revived carrier.
Any government-backed plan for Alitalia will face many hurdles both inside and outside Italy. A group headed by Roberto Colaninno, of motorcycle maker Piaggio SpA, and including a major bank, is known to be putting a rescue plan together. There has been confirmation of talks between this consortium and Lufthansa.
The question of European law is an important factor in Alitalia”s future. Ryanair, a major player in the Italian market has always been vociferous in its condemnation of what it calls ”state aid” and whilst the EU itself has failed to comment at this stage Brussels too has severely censured Italy and its airline in the past, a so-called ”final warning” being issued. Willie Walsh of British Airways is another severe critic of Alitalia and its manoeuvrings to stay flying, even if not solvent.
On most routes Alitalia competes with other carriers. The Air One arrangement calls for major job cuts. Any strike action by the labour unions might be self-destructing with potential customers moving across to alternative airlines.
Malcolm Ginsberg
More about Alitalia here