Alitalia, a.k.a. "The never ending story"

tonycutrella

Following the failure of Air France-KLM to reach an agreement with unions over restructuring plan, the offer for taking over Alitalia has been withdrawn for good a few weeks ago.

Alitalia, who is running out of cash much quicker than declared, announced today its plan to ground 37 aircrafts:

• 3 Boeing 767-300 - no cash to renew the lease
• 16 McDD MD-82
• 14 Embraer ERJ-145 - the entire fleet
• 4 ATR72 - probably the oldest ones

It is almost excruciating to see an historic national carrier dragging on this way. It would be much better if someone takes control of the situation and solves the issue once and for all.

Horizon CRJ700

How dissapointing still, all of these current airline disasters cound have been prevented. Alitalia had an opportunity to boost quality and image a long time ago.

C-Rex

Think it was destined to go down. With today's fuel prices and bad company management, it is inevitable... Sad to see AZ being desolved this way.

Horizon CRJ700

Alitalia has one of the most recognizeable liveries, but, as so many airlines are now realizing, of you are going to charge high prices, you must have a good product, good customer service, clean planes, and the planes must land and take off when they are scheduled to do so. Basic principles that seem beyond most airlines today.

tonycutrella

Quote: Originally Posted by Horizon CRJ700 Alitalia has one of the most recognizeable liveries, but, as so many airlines are now realizing, of you are going to charge high prices, you must have a good product, good customer service, clean planes, and the planes must land and take off when they are scheduled to do so. Basic principles that seem beyond most airlines today.

AF/KL's offer stated that the brand & the livery should not have disappeared following acquisition. As the economical offer was next to nothing , this implicitly indicated that the name and the colors of Alitalia are indeed a tangible asset.

The major problem of Alitalia, as you say using different terms, was its inability to face competition. As a state-owned enterprise, Alitalia enjoyed complete monopoly in Italy and was probably considered a sort of goose laying the golden egg. But when the borders of EU opened up and such condition could not be mainitained, no substantial steps were taken to adapt the company to the new environment. The explosion of low-cost carriers and the increasing oil prices are now giving the final blow.

IMHO, the only solution would be a shut-down and re-boot on the wake of what happened for Swissair and Sabena several years ago. But who might politically and socially handle the closure of the largest private employer in Rome, leaving thousands of families on the street????

C-Rex

Quote: Originally Posted by tonycutrella AF/KL's offer stated that the brand & the livery should not have disappeared following acquisition. As the economical offer was next to nothing , this implicitly indicated that the name and the colors of Alitalia are indeed a tangible asset. The major problem of Alitalia, as you say using different terms, was its inability to face competition. As a state-owned enterprise, Alitalia enjoyed complete monopoly in Italy and was probably considered a sort of goose laying the golden egg. But when the borders of EU opened up and such condition could not be mainitained, no substantial steps were taken to adapt the company to the new environment. The explosion of low-cost carriers and the increasing oil prices are now giving the final blow. IMHO, the only solution would be a shut-down and re-boot on the wake of what happened for Swissair and Sabena several years ago. But who might politically and socially handle the closure of the largest private employer in Rome, leaving thousands of families on the street????

The sad reality. But one original going down, and a new refreshened airline being formed, is probably the way to go if ever Alitalia is lucky enough to get revived, just like the Swissair-Swiss/Sabena-SN Brussels cases.

So isn't there any updates from the german airline, Deutshe Lufthansa about a possible merger with Alitalia yet ?

Think DLH is the perfect contender to take over Alitalia, proved over the acquisition of the Swiss airline, no major hiccups, a flawless merge imho.
But heck, I'm just gonna crossed my fingers for AZ, I never liked the airline anyway it's sad to see a big airline go down this way, If one I wanted to go down, is probably Aer Lingus, what a crappy service they provide, no wonder it is a low cost airline now, would AZ follow Aer Lingus foot steps to survive ? I guess time will have to show us....

Aviaction

It's a shame we are losing airlines like Sabena, Swissair and now both Alitalia and Olympic are in severe financial difficulty.
Apart from the continuing fall-out since 2001, the biggest problem is the EU.
Due to their stupidity to "protect" airlines' competiveness, it is illegal for governments to subsidise their national airlines.
Alitalia and the Italian Government are/have been investigated over illegal subsidies. So they can't be bailed out.
The final crunch is current $Barrel oil price, which has already created casualties (Maxjet,EOS et al)
They will just disappear into history along with Aliatalia and Olympic.
So sad because another nameless carrier will be formed to take over, but the heritage will be gone.

tonycutrella

Quote: Originally Posted by C-Rex So isn't there any updates from the german airline, Deutshe Lufthansa about a possible merger with Alitalia yet?

Good question. These are some facts as I know them:

• DLH has repeatedly declared having an interest in the Italian market but not in Alitalia "as is";
• DLH owns 100% of Air Dolomiti an Italian-based regional airline which is used mostly as feeder service from Italy to their Munich hub;
• It is in the news of yesterday that Air Dolomiti will base 6 new airplanes at MXP airport to take over some of the European routes abandoned by Alitalia starting from January 2009

As a mere personal thought, I always suspected that DLH is somehow backing Air One, the other Italian airline. This is just a conjecture, but it is a curious coincidence that the two airlines share very similar liveries - while fuselage with dark blue tail & yellow bird - and also that a few of the 737-400 used by Air One were those phased out by DLH years ago.

Air One has been fighting with AF/KL over the acquisition of Alitalia and their proposal was turned down. Anyway Air One has also jumped on Alitalia's decision/necessity to cut down flights at MXP. They have leased 2 A330 for the summer season which will be put into service in June on the MXP-BOS and MXP-ORD routes.

It might be more convenient to break in silently through the window than making a big noise at the main door!

superbou

Quote: Originally Posted by tonycutrella Following the failure of Air France-KLM to reach an agreement with unions over restructuring plan, the offer for taking over Alitalia has been withdrawn for good a few weeks ago. Alitalia, who is running out of cash much quicker than declared, announced today its plan to ground 37 aircrafts: 3 Boeing 767-300 - no cash to renew the lease 16 McDD MD-82 14 Embraer ERJ-145 - the entire fleet 4 ATR72 - probably the oldest ones It is almost excruciating to see an historic national carrier dragging on this way. It would be much better if someone takes control of the situation and solves the issue once and for all.

Is it the beginning of the end ? I hope no.
If even AF-KLM could have bought Alitalia the brand would have had a long year to live but now ?
Thank you Mr Berlusconi

swisshansa10

Those who break it are expected to fix it. Mr. B must now find a solution and that too fast.

Mystère

Quote: Originally Posted by swisshansa10 Those who break it are expected to fix it. Mr. B must now find a solution and that too fast.

Don't count on this. It seems the trend nowadays is to vote for bragging but otherwise useless leaders, so we'll have to assume their incapacity for the coming years...

tonycutrella

The main problem to me is that companies that do not make profits should not stay on the market and drain resources from people’s pocket to stay alive. Alitalia can’t stand on its feet now, nor it will ever be able to without significant structural changes.

Selling, or rather making a gift of Alitalia to AF/KL was simply the usual local way of solving the problem: leaving the hard decisions to others. The life of the airline in the AF/KL group would have been miserable anyway. There is no doubt that routes would have to be cut, airplanes grounded and people laid off in order to bring it back to profitability. Alitalia would have become a clone of Air Littoral in the initial phase with uncertain perspectives for the future. But allowing this to happen had as a main goal to blame the French for this and, in politicians’ own mind, not losing their face with voters – which are A LOT, considering the number of people working directly or indirectly around Alitalia.

Alitalia has been making losses for a decade or even more and there were either sufficient time or people who could handle the problem accordingly. They preferred to do nothing so far. Now only tough decisions are to be taken and I hope they will.

Hapag-Lloyd

Just some food for thought: what are other EU carriers, like Lufthansa, LOT Polish Airlines. Air France/KLM or Austrian doing right as opposed to Alitalia failing? Of course, comparisons can be drawn to the demise of Swissair (superbly outlined in Sepp Moser´s great book, "Die Swissair Story") and Sabena.

Still, the question remains: why should Alitalia profit from my tax money so they can "muddle on", whereas competing airlines like the ones mentioned above suffer from disadvantages that only benefit the Italian leader and a couple of his voters?

And why should other EU airlines not ask for subsidies, too, to level the playing field? Why not give the same amout of Euro to Lufthansa, BA, Iberia as well?

Sorry to say, but Alitalia is dead, and has been for years. Rather than keep the zombie alive with EU tax money, that money should be put to better use, like in the form of social plans to ease the layoffs for the then former Alitalia employees.

Given Berlusconi´s reputation throughout the EU, that will also probably be the only cause Brussels could be willing to dole out money for.