Alitalia

[HZ123]

Had a look through the threads without finding anything.

What is happening now with regard to the airlines finances as it seems to have gone off the radar ?

[geriatrix]

Quiet, isn't it.

[geriatrix]

Alitalia on verge of bankruptcy: report - Yahoo! News UK (http://uk.news.yahoo.com/alitalia-verge-bankruptcy-report-143458812--finance.html)

It all comes round again .....

[eu01]

Excerpt from the earlier thread:
Just before the miraculous birth of the "new" Alitalia (at the end of 2008):
Alitalia has debts amounting to 2.3 billion euros.What's changed in 2010?
The new, smaller Alitalia is still losing almost €1 million a day (net loss of 326 million € as announced in the 2009 12 month result), the break-even target being postponed again. Not my business, perhaps. I just wonder where from all this money required to keep AZ afloat keeps pouring in?
And the latest report:Alitalia is once more on the verge of bankruptcy as it loses 630,000 euros ($832,000) a day in addition to the 730 million euro deficit accumulated over four years under private ownership, the Repubblica daily said Friday.So, let's count: some 2,300,000,000 euros forgiven by Berlusconi + 730,000,000 deficit accumulated over recent years adds up to over 3 billions EUR. The debt keeps growing, the Italian debt growing as well. The (small?) part of the mysterious silence around so-called "new" Alitalia finally broken, so my old question is here again: who will pay the final bill for all these nationalistic frills of Mr. Berlusconi and other politicians materialized by the very existence of chronically inefficient "national" carrier?

[Fairdealfrank]

Is AZ going down the SR and (former) SN route (i.e. re-emerging in a different format after bankruptcy), or down the MA route (dies with no resurrection)?

[geriatrix]

Well, it's already taken the first option once ....

[davidjohnson6]

Alitalia Flies on Fumes Into Familiar Financial Turbulence - Businessweek (http://www.businessweek.com/articles/2013-10-09/alitalia-flies-on-fumes-into-familair-financial-turbulence)
Italy races to save Alitalia as creditors circle | Reuters (http://uk.reuters.com/article/2013/10/10/alitalia-idUKL6N0I01NU20131010)
Alitalia Capital Needs Explode as Specter of Collapse Looms (1) - Businessweek (http://www.businessweek.com/news/2013-10-09/alitalia-plans-to-more-than-double-size-of-capital-increase)

Anything new this time around ? Money likely to be (once again) found from somewhere and Alitalia carries of flying ?

[eu01]

Let's live the nationalism! If you did associate this issue with Berlusconi alone, you were wrong. Berlusconi has privatized Alitalia and nationalized its debts (look at the source of money for so called "Bad Company"). Now Berlusconi happens to be stripped of power, but the opera buffa's continuation is still defined as a top priority. The "new" Alitalia had to be different and it's a private enterprise now, but it doesn't matter, the carrier will most probably be injected public money again. New bank loans will be guaranteed, while the Italian government, itself cash-strapped, will do everything to persuade some Italian companies to provide even more funding. Even Ferrovie dello Stato, the state railways, will give Alitalia money to obfuscate any direct help. Most probably the Italian post will be obliged to do the same. Just to save the airline and to keep it Italian. The farce is set to continue.

[Barling Magna]

I had a very attentive and pleasant Alitalia crew on a flight from Brindisi to Rome a couple of weeks ago. Nicely turned out A320 with leather seats in economy class. Very pleasant experience all round.

Just saying. :)

[davidjohnson6]

Phew - what a relief
450m euros of cash has been found to bail out privately owned Alitalia, including 100m euros from the state owned Italian post office after the head of the post office was invited to meet the prime minister earlier today. But don't worry - the post office is deemed a commercial company and it's not EU state aid at all - no need for Easyjet or Ryanair to query this through the courts.

[pee]

The competitor's CEO O'Leary just came to my mind... Right now he might prefer not to comment on these Alitalia issues due to his own PR problems, but I think I know his opinion. This time I would possibly agree.

[ATNotts]

If Brussels is all powerful (which if you believe the UK press they most certainly are) you have to ask why they haven't stamped hard on the Italian government's never ending efforts to circumvent the state aid regulations where Alitalia are concerned.

It makes a total mockery of a free and fair market and competition.

Alitalia has been a basket case since I was in short trousers, and should have been liquidated decades ago.

[Torquelink]

Last time around the Italian Government forced a shot-gun marriage between Alitalia and AirOne which, at that time, was profitable. Hasn't taken long for the old Alitalia contagion to infect the whole orgainism.

[davidjohnson6]

Tempting...

State aid complaint form ? European Commission (http://ec.europa.eu/competition/forms/intro_en.html)

[Capetonian]

I used to fly a lot on Alitalia, about 30 years ago, between Africa and Europe, within Europe, and to and from South America, because I was friendly with someone in their office and I got free tickets whenever and wherever and as often as I wanted. Admittedly most of the flights were less than half full, but that's hardly an argument to justify giving free tickets.

The standard of service on board varied from abysmal to mediocre, although the food was usually very good. Considering how many beautiful stylish women there are in Italy, it always amazed me how many old dogs they used to find as cabin crew.

The planes were often tatty and dirty, and they used the horrible DC10s and DC8-63s (I think) on some routes and a very mixed fleet on short haul. They lost or damaged my luggage more times than I care to remember, and whenever I mentioned that I knew 'so and so' my claim was processed generously and without any discussion.

I remember one particularly atrocious and heavy landing at Nairobi where we bounced about 8 times, the overhead bins flew open, people were screaming, and I'm certainly no aviation engineer but I would have thought that some fairly through checks for damage would have been done. We were airborne again within 45 minutes so ......... however that's only speculation on my part but I was not very reassured over their safety.

Then there's their main hub airport, Fiumicino .......... what a badly designed dysfunctional badly run dump, in those days even CDG was better, in fact I think Sheremetyevo was better too.

If ever an airline deserved to be allowed to fail, it's that one, seems nothing has changed. It was jobs for the boys, old school tie network.

[davidjohnson6]

My team - Joaquín Almunia - European Commission (http://ec.europa.eu/commission_2010-2014/almunia/about/team/index_en.htm)

I sent them an email today to the EU Commission asking why press reports indicated the money from the Italian post office (100% owned by the Italian state) to be used to buy new shares in Alitalia would in principle be approved.

To give Brussels credit, I got an answer back within 2 hours, saying that the Italian Govt had not yet notified the EU Commission of the proposed transaction, so for the time being the Commission has to just wait to be told the formal details. The email reply also indicated that once notified, the Commission will then take a look at it.

Just for good measure, I also filed a formal complaint to the EU Commission regarding EU state aid and have a record of receipt from the Commission - makes it that little bit harder for Brussels to ignore as they now have to give me a formal response. If you have an opinion as to whether or not this is state aid, I would encourage others to communicate this to Brussels as well - if you have some basic knowledge of air transport economics, the process is fairly simple.

It is certainly possible that some deal will be done between politicians at a high level to whitewash the whole thing, but the various people in Brussels did at least respond promptly to my enquiry.

[Bengt]

davidjohnson6 To give Brussels credit, I got an answer back within 2 hours, saying that the Italian Govt had not yet notified the EU Commission of the proposed transaction, so for the time being the Commission has to just wait to be told the formal details. The email reply also indicated that once notified, the Commission will then take a look at it.

Just for good measure, I also filed a formal complaint to the EU Commission regarding EU state aid and have a record of receipt from the Commission - makes it that little bit harder for Brussels to ignore as they now have to give me a formal response. If you have an opinion as to whether or not this is state aid, I would encourage others to communicate this to Brussels as well - if you have some basic knowledge of air transport economics, the process is fairly simple.

It is certainly possible that some deal will be done between politicians at a high level to whitewash the whole thing, but the various people in Brussels did at least respond promptly to my enquiry.
Full approval!

[racedo]

Only a matter of time before Italian state runs out of number of companies that it can use to pump money in...........

Given 24 million pax numbers in 2012 that is €20 per passenger this time.

Doubt it will be long before they back again.

[pottwiddler]

David

I admire your conviction but I don't think the EU will do anything, it's happened before...

BBC NEWS | Business | EU to probe Alitalia 'state aid' (http://news.bbc.co.uk/1/hi/business/4189565.stm)

Alitalia must be the worse run business in the world. I mean business in the loosest of terms.

[eu01]

(last year)
So, let's count: some 2,300,000,000 euros forgiven by Berlusconi + 730,000,000 deficit accumulated over recent years adds up to over 3 billions EUR. The debt keeps growing.
Let's count again. Or, why bother. Today.it (http://www.today.it/cronaca/crac-alitalia-inchiesta-costi-cittadini.html) has already done the calculation for us.
"Alitalia (Cai) has costed [the taxpayers] already 4 billions in four years.
Every day the company burns 1.6 million of euros“

Well then. Now when all that money is gone, how to continue without formally breaking any of the EU competition / state aid rules? An Italian recipe is foolproof and simple:1. The state airline is on verge of bankruptcy? Pay its debts, privatize. (four years gone, money disappeared)
2. The private "national" airline is on verge of bankruptcy again? Tell some state enterprises to buy it back from its private owners (re-nationalize), guarantee bank loans, burn more money (a few years gone)
3. Still near bankruptcy? Da capo al fine: pay debts, privatize once more.

[racedo]

Paid to fly with Alitalia once .................cost £500 in total for 2 of us.

They messed up and overbooked return so we got bumped so got €600 in vouchers, business class return to LHR with another airline, use that up for return flights to Rome and then another flight within Europe that they messed up and ended up spending night in hotel at their expense in Milan because connection missed.

Reckon they lost £1500 on the booking at least.

[davidjohnson6]

Twiddler - I am sure the Italian Govt will get the money to Alitalia and it will survive another year. The point about making a formal complaint is that the EU Commission has to give me a formal response. It's all about making it that little bit more difficult for this form of corruption to take place and making Govt officials squirm a bit more when justifying it.

[Fairdealfrank]

If Brussels is all powerful (which if you believe the UK press they most certainly are) you have to ask why they haven't stamped hard on the Italian government's never ending efforts to circumvent the state aid regulations where Alitalia are concerned.

It makes a total mockery of a free and fair market and competition.




The single market IS the problem, it's dysfunctional and not a level playing field. The point is (pretty obvious really) that one size cannot fit all.

Think this comment is wrong? then look at the disaster that is the single currency!

[Capetonian]

I am sure the Italian Govt will get the money to Alitalia and it will survive another year.

No no no. The Italian Government (if it can be called that) is not giving money to Alitalia. It's Posta Italia that's giving them the money. And Posta Italia is ..... ? Surely nobody would even imagine for one moment that this is any way circumventing the rules! Surely not!

As the whole EU and everything connected with it is a farcical web of fraud and deceit, what difference will this make.

On perhaps a more serious note ........ supposing every Ppruner who is concerned about this perpetuation of fraud were to do what David Johnson has done and write to the EU, it might be a lot of emails and they might take some notice.

[Buster the Bear]

A bit like selling Royal Mail to pay for the idiotic immigration policy of the previous Government.

The sooner HMS UK sails out of the EU, the better!

Leave supporting Europe to our German friends, maybe Lufthansa can buy Alitalia....hahahaha

[Capetonian]

How to ruin an airline, Italian style - The Commentator (http://www.thecommentator.com/article/4255/how_to_ruin_an_airline_italian_style)

Full article worth reading, a couple of extracts here :

Alitalia has had a fairly inglorious history. Originally it was a Rome airline. Everyone who worked for Alitalia had to live in Rome. So the ground and air crews in Milan or Venice had to be flown up there and put up in hotels while they worked their shifts, then flown back. Never most people’s airline of choice, except for members of the governing class who travelled free, its name was said to be an acronym of Always Late In Takeoff, Always Late In Arrival, and indeed its punctuality record was and is appalling. Often – it seemed often – you would wait in your seat while nothing happened then a beautifully dressed Italian would stroll on board and the plane could leave. He hadn’t worked up a sweat: he knew they’d wait for him.

[Fairdealfrank]

The sooner HMS UK sails out of the EU, the better!





Quite right Buster! Even better if the UK and the others sail out! Replace the EU structure and bureaucracy with a co-operation council for matters of mutual interest and a free trade zone.

[Phileas Fogg]

The sooner HMS UK sails out of the EU, the better!



Ah yes,

The infamous "island mentality" to the fore, never mind all their fellow countrymen that may have taken the education to learn a foreign language and be making the most of their privilege to live and work in more prosperous jobs and countries of the European Union than those "boring baskets" who decline to leave their island shores except for the occasional holiday and/or booze cruise!

And, no, I don't live and work outside of UK in the EU, I did and I made a bucket load of money doing so sufficient enough to get away from the 20% VAT and the 75 y/o pension age of Blighty to develop my own business in the tropical paradise of a Pacific island.

Good luck y'all sailing out of the EU :)

[Fairdealfrank]

Ah yes,

The infamous "island mentality" to the fore, never mind all their fellow countrymen that may have taken the education to learn a foreign language and be making the most of their privilege to live and work in more prosperous jobs and countries of the European Union than those "boring baskets" who decline to leave their island shores except for the occasional holiday and/or booze cruise!


Interesting, isn't it, how the pro-EU lobby always resort to insults such as "island mentality" (clearly not meant in a complementary way). "Swivel-eyed loons" comes to mind.

If it's not insults, it's fear, such as: if we leave the EU there'll be a loss of 3,000,000 jobs, the country will become a backwater, we'll be like Norway and/or Switzerland (again not meant in a complementary way), we'll be punching below our weight, etc., etc., etc., (yawn).

[davidjohnson6]

Could I gently nudge discussion away from the topic of EU membership in general and back towards Alitalia ?

Air France seems to be letting it be known that it would be happy for it's 25% equity stake in Alitalia to be diluted down to 11% as AF-KL is reluctant to inject more equity into Alitalia for the time being

Air France considers Alitalia stake dilution - report | Reuters (http://uk.reuters.com/article/2013/10/21/uk-airfrance-alitalia-idUKBRE99K03I20131021)

I received a letter from the EU commission about my complaint that the Italian Govt was providing state aid to Alitalia via the state-owned Italian post office, with the following wording:
"... the Commission has decided to open an ex officio preliminary investigation on the matter, registered with number SA.37491"

I'm sure that IAG making a fuss will have forced Brussels into doing something instead of probably ignoring me, but it is gratifying to note that the wheels of bureaucracy do grind into motion from time to time.

[racedo]

DJ

You just a little devil aren't you :cool:

[RoyHudd]

Arrogantly Lax In Training, And Lackadaisical In Airmanship

[Capetonian]

Arrogantly Lax In Training, And Lackadaisical In Airmanship

I would have thought that would apply to a greater degree to Air France.

Always Late In Takeoff, And Later In Arriving, might be more appropriate.

[eu01]

The financing secured now? Great! Next move: let's strike again! The first action, called by Uiltrasporti, Anpac, Avia, Anpav and UGL Transport, will start on October 29 at 10 am, just confirmed. This one will last only four hours, but all of the planned strikes will amount to 48 hours, according to the news (http://finanza.it.msn.com/ansa/alitalia-uilt-conferma-sciopero-del-29-2).

[davidjohnson6]

AF-KL have just written down the value of their Alitalia shareholding, making it rather less likely that they will put up any cash in the current round of fundraising. If AF-KL pull out, other current shareholders are likely to be rather more nervous. Either AF-KL is playing hardball with the other stakeholders at this stage or somebody will have to pull a rabbit out of a hat quickly. Squeaky bum time.

[racedo]

Either AF-KL is playing hardball with the other stakeholders at this stage or somebody will have to pull a rabbit out of a hat quickly. Squeaky bum time.

Needs to be magic rabbit with big wallet.

[pee]

Needs to be magic rabbit with big wallet.
Fiercely trying to find one. Next week are supposed (rumoured) to meet with Aeroflot. AF/KLM are already feared as executioner ("carnifice", if properly translated).

[geriatrix]

"Frying pan" and "Fire" come to mind ...

[racedo]

Fiercely trying to find one. Next week are supposed (rumoured) to meet with Aeroflot. AF/KLM are already feared as executioner ("carnifice", if properly translated).

A marraige made in......................

[eu01]

Alitalia is planning the first mass firing since its 2008 privatization to cut costs, but a source said it was unlikely to go far enough to persuade top shareholder Air France-KLM to rescue it in a cash call.More details in an update published by Reuters (http://uk.reuters.com/article/2013/11/12/uk-alitalia-partner-idUKBRE9AB13120131112).

[pee]

From Alitalia's press release:The Board approved a revised strategic plan that is based on becoming more efficient in the management of assets and more competitive in the marketplace through a sharp reduction in costs.

The plan also calls for the reduction in the number of medium-haul aircraft, while maintaining the number of hours flown in 2013 through fleet optimization and an increase in international and intercontinental flights.

The Board also agreed to postpone to November 27th the deadline for the shareholders to participate in the recapitalization plan approved on October 15, 2013.

This "plan" couldn't have been less specific, it's as vague as possible. Trying to get AF/KLM confidence that way? Or anybody else's? What kind of savings could be achieved that way?

An update (Nov. 15th):
Aeroflot , the state-controlled Russian airline, on Friday ruled out buying or aiding stricken Italian carrier Alitalia, which is seeking a cash injection to keep flying.

“Aeroflot does not plan to buy Alitalia, nor will it participate in any way in its financing,” a representative of the Russian flag carrier told NEWS.GNOM.ES.

...
Italian officials say they hope they can still find another international airline to invest and save the carrier, but time is running out after Air France-KLM walked away from the 300 million euro ($403 million) call for more cash.

[davidjohnson6]

The Italian post office is now planning to change its statutes (essentially articles of association) to now include air transport of passengers in their activities. Wonder why the sudden change of business plan ?

[davidjohnson6]

Does the 27 November (i.e. tomorrow) deadline for raising extra cash from investors still stand, or have events diminished the importance of this date ?

[eu01]

Well, at least Ryanair did hurry to get the Italian expansion announced before the investors make their decision. Strategically correct, as any money injection will have to be rethought in light of this move.

[davidjohnson6]

Anyone got 127 million euros spare ? Existing shareholders say they can't afford 300 million euros as they're finding the Xmas shopping a bit more expensive than they had expected. New deadline for the cash is either 8th or 10th of December.

Alitalia expects cash call to be fully covered | Reuters (http://www.reuters.com/article/2013/11/28/alitalia-idUSL5N0JD31G20131128)

[eu01]

As a private person? I'd never invest. As a politician? Fortunately I'm not one of them.

Good article here, Should Alitalia Be Allowed To Fail? (http://news.airwise.com/story/view/1385625984.html)"The real problem is getting past the politics. Alitalia is not a national treasure anymore, it's a national disgrace and it has been for years," said airline industry analyst James Halstead, managing partner at UK-based Aviation Strategy.

[keel beam]

More to the point, where has the money gone since it's last resurrection?

You can see why AF/KLM don't want to invest further, why did they bother in the first place? Alitalia is a basket case as it stands.

[eu01]

According to the half-official news of The Wall Street Journal Alitalia has just succeeded in raising from its shareholders and creditors a required minimum of €225 million so that Italy's post office will invest in the airline. That will let Alitalia keep flying for several month as it looks for a partner to ensure its long-term survival.

Tomorrow we should expect the announcement of a new saving plan. Italian trade unions will be faced with about 1,900 redundancies and savings of EUR 350 million, part of which would came from cuts to all salaries exceeding 40 000 euro/ year.

[racedo]

That will let Alitalia keep flying for several month as it looks for a partner to ensure its long-term survival. Has KLM told them of the old dutch tale of the boy who stuck his finger in the dyke to prevent flooding ?

On this occasions its similar but its Venice, which is already flooded.

[eu01]

Alitalia has asked banks to extend an existing loan agreement by 50 million euros (£41,415,433.34), daily Il Messaggero reported on Saturday, in a sign the troubled Italian airline may again be facing a liquidity crunch just weeks after a capital increase.
Read more (Reuters/euronews) (http://www.euronews.com/business-newswires/2282504-italys-alitalia-seeks-more-bank-funding-paper/).

Apparently, the show must go on. But does it really have to?

[EI-BUD]

Who picks up the tab for all of these lines of credit that the airline gets if it all goes pair shaped after all?


EU rules are completely ignored as time goes by, sadly the same lines of credit were not possible for some other airlines that didn't make it due to lack of financial backing and are confined to the history books. There has to be a big reality check, the airline in its present form is not sustainable, and with the impending expansion of Vueling, Ryanair and easyJet in Rome can only add woe to the saga. The effects of bookings already with these airlines is bound to be hurting.

[pee]

Berlusconi about Alitalia:

"We rescued Alitalia in 2008. Don't blame me as the former Prime Minister for the next crisis right now. The Italian flag carrier carries 21 million passengers and employs 14 000 people, while Ryanair carries 61 million and does so with only 6000 employees".

That kind of explanation given by Berlusconi today as Alitalia, further in debts, still didn't get the rescue package from Etihad.

[Heathrow Harry]

Would we feel the same way if BA looked like going out of business??

I don't care but a lot of people equate their national airline withe Country

[pee]

I don't care but a lot of people equate their national airline withe Country

It is not always good for the country in question. Let's forget the old debts now (as Italians want). Since 2008 the Italian taxpayers had to pay millions of euros every year for keeping the "new" Alitalia alive, also for government's redundancy payment schemes, bank loans etc. Alitalia has not moved away from the spectre of bankruptcy even for a while.

By the way, the letter from Etihad's Hogan finally did arrive (yesterday evening). Well, with the new, much worse conditions. The conditions are in fact much worse than these given by KLM/ Air France back in 2008. Did this struggle for a "national airline" really pay?

[Heathrow Harry]

I know that,you know that and I'm sure the Treasury or Finance Ministry in each country knows it

but there are jobs at stake, political influence, the press (think "Finnish Govt sells Finnair out to Ryanair"), freebies from the airline, jobs for retired politicians and civil servants.......................

It has to get really bad before sanity kicks in......... :rolleyes::rolleyes:

[LGS6753]

From Travel Mole:

Etihad rescues ailing Alitalia

Abu Dhabi-based Etihad today confirmed that it had taken a 49% stake in Alitalia following months of negotiations.

Although the size of the deal was not revealed, it is believed to be the biggest investment for the Middle Eastern carrier.

The Italian government revealed earlier this month that Etihad was looking to invest €560 million in Alitalia, with a further €690m over the next four years.

The deal could save the near-bankrupt Italian national carrier, but it is expected to lead to widespread job losses. Etihad is expected to shrink the workforce by 2,250 to around 11,500.

The airlines said they will now move to finalise the transactional documents, that will include the agreed upon conditions, as soon as possible.

The investment is subject to final regulatory approvals.



Wednesday, June 25, 2014

[danielson81]

Sound familiar?

Alitalia/Etihad to buy 49% stake in Air Malta, Opposition gives initial reaction - Times of Malta mobile (http://www.timesofmalta.com/mobile/view/20160427/local/air-malta.610250)

Edit - Not sure if this warrants it's own thread or not?

[eu01]

The story goes on...Troubled airline Alitalia on Friday presented trade unions with plans to cut over 2,000 jobs and slash salaries by up to a third under a cost-cutting survival plan.

Unions said the job cuts would total more than 2,400, nearly a fifth of the company's global headcount, while the company put the total at 2,000 and said there plans to recruit 500 new cabin crew by 2019 as the restructuring hopefully brings a return to profitability.
Company CEO Cramer Ball said the job cuts would mainly come from a 51 per cent reduction in office staff and a 20 per cent reduction in non-flying operational roles./.../

Union officials told AFP that staff who survive the cull are being asked to accept drastic pay cuts -- up to 28 percent for pilots and up to 32 percent for hostesses and stewards.
The unions called for a strike on April 5 to protest a restructuring plan./.../ Source: AFP

[davidjohnson6]

Looks like there will be some kind of filing procedure with the courts this week around bankruptcy protection or special administration. Italian Govt have said they refuse to spend any more taxpayer funds on the company and I doubt the UAE-based sugar-daddy is inclined to offer more cash either

Anyone have thoughts ?

[toledoashley]

My best guess is a Swiss style rebirth - someone else taking the Alitalia branding.

[davidjohnson6]

Lufthansa CFO announced they have no intention of buying Alitalia
Norwegian have said they don't intend to buy any Alitalia assets
Italian State Railways have said they are not interested

Italian Govt are to arrange a 6 month bridging loan - presumably to ensure an orderly period while everyone decides what to do and presumably keep the tourists coming over the main tourist season

[01475]

How long does it take the EU to turn down a state aid application?

[paully]

Italy, as a state, is effectively bust. However it's widely known that it's economy is too big for the EU, or to give it it's other name Germany, to bail out.The Italian state cannot afford to bail out Alitalia nor can it afford to let it go. They hope by kicking the can down the Piazza they can buy some more time to figure out another complicated way to pour money down their unique pan. The EU will look on but take no action for fear that things may become worse..House of cards indeed..

[01475]

They have to turn it down, and all concerned must know that.

They'll presumably be looking to use the time before it happens to get a replacement organised, but after what happened with Estonian Airways and Estonia getting caught off guard they'd be wise to be quick about it!

[Buster the Bear]

Selling Heathrow slots might give them a short-term lifeline? 5 (at least) return slot pairs per day must be valuable, unless the Administrators will do that for them?

[DaveReidUK]

Selling Heathrow slots might give them a short-term lifeline? 5 (at least) return slot pairs per day must be valuable, unless the Administrators will do that for them?

5: 3 x Rome, 2 x Milan

[inOban]

Any word as to what happened at the shareholders meeting today?

[davidjohnson6]

Shareholder meeting delayed from 27 April to 02 May

[Buster the Bear]

Depending upon the time of arrival and departure, those slot pairs are probably worth more than the airline!

[nguba]

Alitalia no longer owns its LHR slots. Alitalia did a sale and leaseback with its 49% shareholder when it bought its stake in the airline.

[skyloone]

Expect a classic judge. Somehow money will be found. Backroom deals to find private funds. Perhaps a few very interesting promises to affomentioned funders from Rome in exchange for keeping the wheels turning.
Alitalia has more lives than a plague of cats!

[davidjohnson6]

Board has asked for Alitalia to go into special administration. Commissioners to be appointed to see what can be salvaged. Flight operations continue for the time being

[HH6702]

Could we be seeing the following

Eurowings Italy set up.
Aircraft moved to eurowings and staff agree to new eurowings contracts ?

[Dubaian]

Alitalia to enter bankruptcy proceedings - BBC News (http://www.bbc.com/news/business-39780604)

Wonder what one of it's major recent financial backers (cannot name in compliance with forum rules - but read the linked article) makes of this???

Some of their other tie-ups also don't look too clever. Air Berlin, for example.

[Denti]

Yup, airberlin just posted a 782 million loss for 2016. However, they have diversified a bit with Lufthansa having a very vested interest in that company as they operate 38 aircraft in a wetlease deal for Eurowings and Austrian. Apparently one Mr. Spohr, CEO of said Company, accompanied Mrs. Merkel on her middle east tour, especially to Abu Dhabi on the last weekend.

[ZFT]

Where do Alitalia retirees stand under Italian law? (I've a friend of old, long retired, ex Station Manager many mutual places).

[SOPS]

Report says they have received 7 billion in State Aid over last 10 years. I thought that was not allowed in the EU.

[Dubaian]

SOPS - sh - don't tell Trump. :-)

[Joe_K]

State aid requires approval by the European Commission. Not quite the same thing as "not allowed".

[WHBM]

I wonder what has happened to Etihad's investment in Alitalia. How much was it overall ? Presumably that is just lost. In which case the Sheikhs will be more than a little aggrieved.

On the other hand, if they have been leasing 8 Heathrow slot pairs to Alitalia, presumably for a song, that is a significant security on the investment. Guess that what remains of Alitalia in the future will be making an increased presence at London City.

[CCGE29]

Now reporting a six hundred million euro loan to Alitalia. When is the Italian government going to wake up and realise that this is money down the drain?

There was an opinion survey completed earlier in which 77% of those surveyed were opposed to the Italian Government 'loaning' any more money to the failed carrier.

[wingview]

About 15 years ago Alitalia was already in trouble. KLM invested some money (in the good old days) and tried to get them out of trouble. Later on AFKL did the same but last year Alitalia kicked their @sses because of Etihad was now in favor. Now finally they go down. Thanks to the Unions and poor management.
1650 would have lost their jobs and a salary cut for the rest. I wonder how many will lose their jobs and salary now. Just typical.

[Piltdown Man]

Alitalia have been a basket case for years. Quite how they have managed to hang on for so long is a miracle. A bit like Italy's banks. But my heart goes out to those who will lose their jobs as a result. As for their minority shareholder, who cares?

[davidjohnson6]

The raising of the loan to 600m euros is apparently to ensure the airline can definitely cover the summer and possibly until the next election. By deferring until after Italy votes, it avoids a piece of national infrastructure becoming a political football

It is in nobody's interest for Alitalia to collapse suddenly - if it's going to be liquidated (and I can see plenty of reason for an eventual liquidation) then much better for there to be some degree of control and predictability not only for the staff but also to ensure passengers can plan suitably rather than transport to/from/in Italy suddenly turning chaotic

I can cerainly understand why in a country which is so dependent on inbound tourism during the summer that the Govt would want Alitalia to survive until the end of October. Presumably Alitalia makes a large operating loss in winter but in summer maybe at least comes close to breaking even.
I can also understand why Rome wants Alitalia in a stable state for a few months so that the administrators have time to perform a full analysis of the company, give time for negotiations on sales of part of the company and allow any potential buyers to perform due diligence on what they are buying,

[racedo]

The raising of the loan to 600m euros is apparently to ensure the airline can definitely cover the summer and possibly until the next election. By deferring until after Italy votes, it avoids a piece of national infrastructure becoming a political football

It is in nobody's interest for Alitalia to collapse suddenly - if it's going to be liquidated (and I can see plenty of reason for an eventual liquidation) then much better for there to be some degree of control and predictability not only for the staff but also to ensure passengers can plan suitably rather than transport to/from/in Italy suddenly turning chaotic

I can cerainly understand why in a country which is so dependent on inbound tourism during the summer that the Govt would want Alitalia to survive until the end of October. Presumably Alitalia makes a large operating loss in winter but in summer maybe at least comes close to breaking even.
I can also understand why Rome wants Alitalia in a stable state for a few months so that the administrators have time to perform a full analysis of the company, give time for negotiations on sales of part of the company and allow any potential buyers to perform due diligence on what they are buying,



Alitalia will have circa 4 million or less seats available in July-August...... €600 Million just ain't worth it.

[testpanel]

Thanks to the Unions and poor management.
1650 would have lost their jobs and a salary cut for the rest.

and:

Report says they have received 7 billion in State Aid over last 10 years.

Sorry,
Typical italian attitude, they deserve to loose after sooooo many years of corruption and attitude problems. If they know how to do it (typical italian expression) than show us!

And do not complain if you alitalia pilots find a job with another european airline; explaining how good it was in your former airline:ugh: (and yes i know a few...)

[172_driver]

Ryanair will have a field day filling up their Italian bases.

[Iver]

This situation looks GRAVE. No guarantee any new state funds will be repaid. Will be curious to see if any new White Knights swoop in. After Etihad and the latest union vote, highly unlikely.

Good luck to all involved!

[skyloone]

Not sure many ex Alitalia pilots are going to be rushing to the FR door? A major restructuring with a new company? Older pilots not inclined to finish career at FR. Don't know details but pensions will probably work out well. Therefore natural attrition taking care of the pilot / frame reductions going into new company. Alitalia pilot demographic not that young I think. Nett effect is not that many spare pilots for the new ops which will probably still have better t's&c's than FR. There'll be a few but not the hoards that FR need. Also they'll be running through the summer so no short term candidates. All need type rating too...

[EAM]

New OPS??? I think many here don't know that this is not Alitalia. The company we are talking about is CAI Compagnia Aerea Italiana. It has been created in 2008 by about 12 italian investors to "save" Alitalia. They run the Alitalia brand. Alitalia it self went bust in 2008, CAI took everything they needed, like name, aircrafts, staff, slots etc. plus AirOne and started from 0 on the 18.01.2009.

Which means the debit they have, was built up from 0 in 2009 until now.
So knowing that, what sense would it make to start the whole **** again?:ugh:

[t1grm]

I'd like to say good riddance to another basket case legacy carrier that should have gone bankrupt years ago but knowing the Italians they will come up with some back door deal to resurrect it under a new name that gets EU approval.

[pax britanica]

And so who is next? We have seen the gradual demise of European legacy carriers either through bankruptcy or merger/takeover. would KL, IB and OS still be around without the powerful parent taking them over or merging. in fact is any Euro legacy carrier unchanged from twenty years ago.

The way things are going another ten years will see FR and Easy dominating everything except the traditional big city pairs where there is enough premium traffic for the remaining big players which by them are effectively LH inc Eurowings) BA (inc Vueling) and AF which leads one to ask is that really the competitive market the regulators were striving for for will it be even more of a cartel than back in the days of national airlines and pooled routes

[t1grm]

Air Malta with a bit of luck

P.S. Regards KL/AF I thought it was the other way round? KL doing quite well and propping up the struggling AF side?

[ATC Watcher]

ZFT, your friend should be OK . In most western European countries , including Italy, pensions funds are , unlike in the US for instance, separate entities and normally not affected by bankruptcies and often even backed up or guaranteed by the State. That is if you had a plain vanilla Alitalia contract of course, and not working for a subcontractor entity..

[ZFT]

Thanks. No, he worked from early 60s through to late 80s as an Alitalia employee. Just about always on outstations.

[RAT 5]

Regards KL/AF I thought it was the other way round? KL doing quite well and propping up the struggling AF side?

It is now; not sure of the exact facts at the time of the merger/takeover. What was the case is that AF was bankrupt well before and the French government squeezed Brussels to allow 3 tranches of conditional investment to save AF. Meanwhile KLM was profitable. Then, after the 'saving/resurrection of AF, somehow AF managed to become the senior partner in the group, but now KLM perhaps wishes it could jettison the dragging weight of AF.
One question is why the Alitalia TEAM project didn't succeed. This was started under scrutiny from Brussels in 1995. There could be no expansion, as were the plans, and costs had to be reduced and the company restructured. Obviously it didn't work. The events of 2009 were unknown to me, but it sounds very plausible within Italy and the whole financial industry.
How Swissair ever rose from the shoes is another mystery that perhaps only the financiers know the answer. From experiences in my time at AZ during the Team project I suspect many of the Italian travelling public might say good riddance. It will be a vacuum to fill; being mixture of long & short haul. Might those routes be carved up and 2 separate companies formed, or will the other EU short-haul operators move in and pick the bones. Who will fill the long-haul? Will those routes be serviced from the other end, or spoke/hub into the north EU airports?

[Heathrow Harry]

"When is the Italian government going to wake up and realise that this is money down the drain?"

Well it isn't from their point of view - it keeps a lot of people in work, it saves the jobs handed out to old friends over the last 30 years, it pushes the issue down the road for someone else to worry about (maybe), it saves a nasty smell around at election time

Italian politics & economics is not like politics and economics in the UK

[DirtyProp]

As an Italian I can reasonably say that probably the majority of my citizens are completely fed-up with this mockery of a carrier and would love to see it dismantled tomorrow morning. Problem is, there are 12000 and more people to take care of.
In the meantime, the govt nominated 3 liquidators and approved a loan of 600 mil EUR to continue operations for the time being.
Also, their AOC will be renewed on a month-to-month basis from now on. They keep saying that it will not be nationalized, and let's hope they keep their word.

[inOban]

Certain people on this forum, and in the wider UK, complain when the UK is prohibited from doing something because of EU regulations. It works both ways: the Italian government cannot bail out Alitalia because that would be illegal under EU rules, and anyway the government has made it clear that it has no intention of doing so (and 77% of the population agree). Even the loan will have to be approved by the EU. It stands to reason that whatever assets it has will realise more in an orderly disposal than in a fire sale.

[rowly6339]

The way I read all this is that the staff were given a vote, on the one hand they could take a pay cut and lose some jobs but the majority keep theirs and the company will be re-financed, or on the other hand they say no to all this and everyone loses their job.


I may be wrong but if it was me I would take the hit just to save peoples jobs but it seems the staff aren't interested and are happy to shut down the airline.

[inOban]

Their bluff was called. Like certain posters on this thread, they assumed there would be another bailout.

[markkal]

Already 8.000.000.000 euros, yes you read correctly 8 billion euros as disclosed today by the news, poured by governments over 2 decades;

Squandering taxpayer money, just to avoid social and political unrest. Years ago authorities and unions snatched a scheme which allowed unprecedented unemployment benefits of 80% of salaries for 7 years for a large part of the staff to be laid off..

And here they come (Today) with the usual loan (Taxpayer money) of 600.000.000 euros which will never be paid back, just to postpone the inevitable fate..

Sad for those, and there are and were many, quailfied professionals who soon or later will pay dearly. Sad for an airline which was Italy's pride for more than half a century.

Nepotism which is the leprosy of Italy, political wrongdoings known to undermine any enterprise in the country will prevent a possible recovery, add wrong strategical decisions, failure to adapt to a changing environment, and the fate is sealed, but when will that happen ?

In the meantime, there are pressures to find a buyer within 6 months, to handover this mess, so as to involve a foreign operator in the quest for implementing those impossible reforms..

Will there be any interest ?

[racedo]

Could we be seeing the following

Eurowings Italy set up.
Aircraft moved to eurowings and staff agree to new eurowings contracts ?

80% of Aircraft are EI- flagged i.e. Lease co.

[northboy]

80% of Aircraft are EI- flagged i.e. Lease co.
LH has said that it isn't interested in Alitalia:
http://uk.mobile.reuters.com/article/idUKKBN17T0ZZ
Probably not interested in returning to Italy either after LH Italia either.

[DirtyProp]

Already 8.000.000.000 euros, yes you read correctly 8 billion euros as disclosed today by the news, poured by governments over 2 decades;


Plus 1.8 Billion from Etihad, let's not forget those.

[Habana2118]

I think expansion of Vueling and opening of a LEVEL long haul base are more likely ...

[gearlever]

My sympathy for ****** is very limited.

[pax britanica]

RAT5 and T1grm

I did debate for some minutes as to which waya round to put Af/KL but then do BA and IB have joint ownership or is it a hidden BA take over.

I think the realpolitic of it is AF is more important than KL because France is bigger than the Netherlands and I dont thinl the Dutch care about status like we do in Uk, as long as they have the money and the wider Eu and financial advantages of what is a pretty powerful group they will just keep quiet.

Not an expert on these things but since the 'joining' both seem to have benefited in some ways from route rationalisation, financing and fleet development and have managed to keep two distinct and established brands .

The thing is what will happen to service and fares in Europe if we end up with an airline map that comprises
AF/KL BA/IB LH uber Alles plus Ryanair and Ezy

[t1grm]

We effectively already have that with One World, Sky Team, Star Alliance, EZ and FR. Europe is to all intents and purposes dominated by 5 groups/alliances. I think we'll just see further consolidation within those groups/alliances. I think 5 big players is a good number to maintain competition and wouldn't be too worried if IAG (for example) ended up owning all the EU based airlines in the One World alliance. All IMHO of course :)

[Denti]

I think 5 big players is a good number to maintain competition and wouldn't be too worried if IAG (for example) ended up owning all the EU based airlines in the One World alliance.

Well, i don't think they have any interest whatsoever into owning airberlin, which is after all still a oneworld member, even though they fly a third of their aircraft for Austrian and Eurowings.

[SINGAPURCANAC]

it seems that everyone forgets old Alitalia fact :
Every Monday bankruptcy,every Friday they are still there.
:}

[SOPS]

How much money can this airline suck up? Where does it all go?

[DirtyProp]

As much as you can throw at her, faster than you can throw it at her apparently.

Where does it all go?

Good question.
Less than a year ago (6 July 2016) upper mgmt was saying that they were losing 500.000 EUR per day. Half a mil every day!
Empty planes and unprofitable routes, perhaps?

[Rwy in Sight]

Empty planes and unprofitable routes, perhaps?

Is that so? Based on Olympic Airways experience it had more to do with full flights not being profitable due to high costs?

[gearlever]

Is that so? Based on Olympic Airways experience it had more to do with full flights not being profitable due to high costs?

Olympic and Alitalia same desease:
NEPOTISM

[markkal]

taxpayer money squandered by governments does wonders, it's magic,

[HH6702]

Personally I think that all the low cost carriers Ryanair, EasyJet and vueling will all base extra aircraft in Italy ASAP so that when AZ does go there is others already waiting to carry there pax.

Is there many routes that are not currently serve by other airlines or does AZ have competition on most routes

[cjhants]

Thanks BPI. Very clever.
Cheered me up no end.

[Kewbick]

..and all this under the watchful eye of IATA, the European Union, the World Trade Federation, NAFTA and the Trans Pacific Partnership Agreement..

[pax britanica]

button push ignored

i think you have missed out the bit where LH collapses and Aeroflot take over Czech LOT Wizz Tarom and the US 3 divest BA and AF and 20 years later retrench back to the states

[RAT 5]

Where is China Airlines in all of this? Don't the Chinese have all the dosh?

[DirtyProp]

China has been invaded by the Fat Wun and his glorious army.
Turned out that he was an ally of Trump all along.

[racedo]

Personally I think that all the low cost carriers Ryanair, EasyJet and vueling will all base extra aircraft in Italy ASAP so that when AZ does go there is others already waiting to carry there pax.

Is there many routes that are not currently serve by other airlines or does AZ have competition on most routes

Ryanair already carrys more passengers in Italian market than Alitalia and has for last 3-4 years.

[HH6702]

So expect Ryanair to turn up the pressure on the market

[skyloone]

Not so sure FR has the pilots to up their flying programme much. From what I hear it's a bit tight.

[racedo]

Not so sure FR has the pilots to up their flying programme much. From what I hear it's a bit tight.

Wet leasing aircraft in which previously did the route for Alitalia is a likely option. After all flight crew just made unemployed may like that option.

[davidjohnson6]

Perhaps unsurprising but IAG and AF-KL have both ruled themselve out from getting involved with any attempt to save Alitalia. Lufthansa and Norwegian ruled themselves out a while ago. Easyjet are actively interested in opportunities post Alitalia collapse. The Italian Govt had ruled out a full-scale bailout

I suppose there is still the longshot of HNA but options right now seems meagre

[waffler]

The vultures are gathering in the trees above.

[davidjohnson6]

Alitalia will launch new long haul routes to Los Angeles, Delhi and the Maldives. I had imagined that passengers would be cautious (ie lousy ticket sales) about paying funds many months ahead for a product that may very well not materialise or cause them to be stranded in a city far from home but perhaps I am just a bit negative

I used to think that airlines in trouble would typically cut out any new high risk launches and focus on getting the existing business stabilised but maybe I'm missing something here...

[crewmeal]

UK customers could always pay by credit card (if the fares are over £100) and get their money back it it goes to the wall.

[lederhosen]

There seems to be no penalty for destroying yields using other people's money in this case those owed money by Alitalia and the italian state. Air Berlin appears to have been doing the same thing, losing millions a day while selling seats at dumping prices. The employees of other airlines are also losing out, as lower ticket prices directly affect the financial health of their own companies.

[840]

A decade ago, I needed to fly from Amsterdam to Rome and opted for KLM purely because I feared Alitalia was bout to go out of business.

This is the longest goodbye in history.

[RAT 5]

Air Berlin appears to have been doing the same thing, losing millions a day while selling seats at dumping prices. The employees of other airlines are also losing out, as lower ticket prices directly affect the financial health of their own companies.

In early 80's I was in the UK charter airline business. Laker had screwed it self over buying too many Airbuses. It tried to survive by creating cash flow and dumping seats on the charter market. Competitors followed suit. Laker went bust anyway and we were penalised with lower T's & C's. Hindsight is wonderful. We should not have dropped prices & standards.
Ah. Look what LoCo's have done to the traditional industry. Yes; they have broken the cartel of prices, but T's & C's have also suffered, badly. However, there major majors seem to have kept acceptable standards for pax, maintained reasonable T's & C's and still make handsome profits. It takes team work. Unfortunately in some LoCo's that is lacking and the balance of power is one sided. It just takes common sense team work for a common goal and less greed on both sides.

[davidjohnson6]

Deadline for nonbinding expressions of interest in purchasing Alitalia (or its assets) has now passed. Commissioners are presumably now opening the envelopes as I type this message
RAI reports that Lufthansa has confirmed no interest, but rumours exist that Delta or a private equity fund (Cerberus or Indigo Capital) might wish to proceed further in the process

[Piltdown Man]

Why on earth would anybody want to invest in Alitalia, especially a private equity fund if it can't asset strip or show a return in a few hours. Alitalia has a poor reputation, it loses money faster than it can be pumped in and has a workforce that is in total denial. Certainly the Italian market is worth some investment, once the EU have sorted its banking problems (some nasty medicine may have to be taken). Once that is done, existing market players will expand and/or either new operators will move in. But it won't be Alitalia. After all, it can't be illegally subsidised (again) by its government. Surely not...

[skyloone]

What's it's fleet like.
Buy airline having negotiated all liabilities, pensions etc... to state then start again with new t&c's on same frames, licences. Axe/shrink short haul.... and get hold of LH frames currently not available cheaply by other means. Can think of one party who has some previous and has a current wish list!

[RAT 5]

What's it's fleet like.

There are many EI- reg a/c. What's the consequence of shutting up shop? What would the consequence be if anyone else tried to take them over?

[racedo]

As indicated a couple of weeks ago 90% of fleet is EI registered hence likely Leased.

[davidjohnson6]

Reuters reports that 32 nonbinding expressions of interest in Alitalia were received by the commissioners. Some of these may be simply a rival wanting just a sneaky look at the books of Alitalia with zero intention of ever making a binding bid

[davidjohnson6]

Non-binding bids for assets of Alitalia due by 21 July

[inOban]

Non-binding bids for assets of Alitalia due by 21 July
They have apparently shortlisted 11 airlines from the original 35 who expressed interest. Anyone know which?

[My names Turkish]

Supposing for a moment that for whatever reason there was a significant or complete reduction by Alitalia at Linate which is slot congested, how would the slots be distributed? Would they simply be auctioned off to the highest bidder? What is the process at slot restricted airports in the case of a large number of slots becoming available?

[AvGeek1]

Alitalia are withdrawing from London Heathrow and moving all flights to London Stansted, effective March 2018

[daz211]

Can I ask where you got this info from ? Do you have a link ?
I have just made a dummy booking for April 2018 and still showing LHR not STN.

And hope you don't mind I copied it to the Stansted thread hoping for more info :ok:

[RAT 5]

Will Alitalia still be operating in March 2018? It seems a little presumptive.

[RoyHudd]

Rather arrogant and stylish carrier, similar in manner to the country Alitalia used to represent. Overpaid staff, diffident attitude to high-paying pax, silly pensions and benefits, but a poor legacy carrier in terms of ability to deliver. In fact, AZ provided the opening for low-cost carriers both in Italy and now all over Europe. An opening that was so easily exploited.

As for AZ now, just look at their very questionable safety record, their poor if not abysmal customer relations, their bloated bureaucracy. And yet it is still somehow in existence. Let AZ try their luck at STN. Maybe serving Ciampino, Bergamo, Beauvais. For sure an Italian government will pour yet more taxpayers' money into them.

But really, shouldn't they be permitted to go bust?

And then replaced by a proper airline without the abominable legacy.

[inOban]

Even MOL says that the process of selling off the remaining assets of Alitalia has been open and transparent. Unlike Air Berlin.

RoyHudd is not the only poster who finds it impossible to believe that Italian government would follow proper procedure.

[BCALBOY]

So far as I am aware the slots that AZuse at LHR currently leased from Etihad
Who previously purchased them in return for a €60m lifeline.

If AZ is being sold off , perhaps EY want to sell the slots to recoup some of their cash from the failed investment.

This would leave AZ or successor no option than to relocate to another London
Airport.

[AirportPlanner1]

AZ don't need to relocate to another London airport. They have an existing operation at LCY, if they're still around in the months and years to come they should focus on that. They'd be shielded from the locos and if they really wanted to feed any hypothetical long haul operation at MXP there's nothing to stop them adding a few flights each day to complement LIN.

I doubt they even particularly need LHR.

[WHBM]

One thing is the notably high level of landing fees at LCY for their general and connecting fare levels, as opposed to business pax. The E190 used there is of course significantly smaller than the A320 at Heathrow.

Quite apart from any long-haul connections, my experience on AZ from London is they carry a lot of connecting traffic to other Italian destinations through LIN and FCO - Sardinia, Sicily, Brindisi, and other points. There may be services to these points by the LoCos, but AZ can offer multiple departures per day on such connections.

[mik3bravo]

EU laws should in theory prevent state revenue proping up a state asset.

However, we're dealing with an EU establishment that is unwilling to stand up to the dominance and down right repugnant behaviours of certain EU member states. The nod wink inner circle is cancerous and lies at the heart of the Commission.

There is of course a legal definition for that type of action.

[davidjohnson6]

As far as I can tell, the bankruptcy process for Alitalia has been put on hold until April 2018 to avoid interfering with national elections

Is my understanding correct and does it therefore mean it is just business as usual for the next 6 months, without the risk of anything nasty similiar to Monarch or Air Berlin ?

[LEGAL TENDER]

Business as usual even after the 6 months period. The goverment will always save AZ. They'd have bankrupted 20 years ago if that wasn't the case!

[Lon12]

Alitalia has just announced daily flight to Valencia (restart) from March.

[canberra97]

From FCO I take it regarding VLC!