So, they”re finally breaking for cover. After what has seemed like an entire year”s worth of ”will they, won”t they?” speculation, Air France has at last formally laid its cards on the table for Alitalia.
There have been a range of suitors including Air One and Aeroflot this year, while Lufthansa has been a distant sparing partner, but it would appear that the Air France-KLM grouping ” already a European powerhouse ” is the front runner.
For what seems like an age, the Italian flag carrier has been beset by unrest, walkouts and a feeling of general malaise that has given the airline a lame duck appearance.
And Air France clearly feels the same. The document supporting its bid comes with a raft of caveats, not the least of which is a direct appeal, if not command, to the workforce.
This is as clear as it gets: ”Air France-KLM is counting on the support of the carrier”s entire workforce, who would benefit from the results of their company”s growth, as well as that of the group.”
Key word in that sentence is ”entire.” Plagued by industrial unrest, Air France ” itself no stranger also to militant unions ” does not want to become embroiled in labyrinthine disputes. There will undoubtedly be some pain as ”restructuring” kicks in and ”rationalisation” of routes as all three carriers realise economies of scale, but why shouldn”t Air France make a go of it?
Italy is in the G8 for goodness sake, it has a large, mobile population along the lines of any other sophisticated European country and, as the French carrier points out, has lost a large part of domestic goodwill.
”The purpose of this project is to win back the Italian market, to the reputation of its brand and to the assertion of its Italian identity,” it notes. Well, the last one may be a nationalistic sop to the unions, who may be rolling up their collective sleeves at the very thought of foreign ownership, but the first two are hard-headed business realities.
”Winning back” implies an element of distrust from the Italian public to its carrier, while ”reputation” needs no explanation; Alitalia has simply become a lumbering giant in urgent need of corrective surgery.
But of course, Air France is up against competition, although the news that Lufthansa has pulled out of any bid eases that process. Air One has submitted a non-binding offer and says it hopes to hear ”within two weeks” of any decision.
And just to put the cat among the pigeons, Ryanair is asking the European Commission to block the Air France bid for Alitalia, insisting that both airlines pay back what it claims is ”2.7bn of combined state aid, although the Irish carrier”s chances of success look slim.
Should Alitalia harbour any reservations on the deal, it ought to look no further than KLM, whose consolidation into the Air France empire appears to have reaped rewards. Charles de Gaulle and Schiphol now represent two of Europe”s most potent airport forces, with many in the UK for example, queuing up to point fingers at the duo across the English Channel as a dire warning of what will happen to Heathrow if a third runway is not constructed.
Air France-KLM of course also brings the power of the SkyTeam alliance, one of the truly global and powerful triumvirate of groupings that so characterise air travel today.
The advent of Open Skies will mean that horsetrading of slots ” particularly from the UK - will become ever more common, while a more closely-defined relationship between Alitalia and any new owners can facilitate these changes more quickly.
That those changes might emanate from Paris rather than Rome should not be of undue concern to Alitalia. It”s hardly in a position to pick and choose, while any tie-up should secure its future ” with the unions ” for a long while yet.
Simon Warburton
ABTN editor