Alitalia (Merged)

[billy164]

Ty Philpat, but then again if I was sane I would be in some delightful hot country instead of a freezing cold and wet one lol

On a point of interest why are BA, Air France/KLM Lufthansa interested in a share of Alitalia surely they are competitors and is the name something they are interested in being involved with?

Who would be the best partner anyway?

[xplorer]

Alitalia bail out plan!!

I've heard rumours that Air France is showing a keen interest in Alitalia... Is this true?

[Finn47]

"Lobbying by Italian unions and politicians (is tipping the scales towards Lufthansa)"

Business Feed Article | Business | guardian.co.uk

Sounds vaguely familiar to me...

[Daniel_11000]

If those two ‘big’ are battling for a minority stake in CAI, it seems to me that, contrary to most of the opinions in this forum, there is still something interesting for investors in this poor and bad-managed Italy….

[Finn47]

Read about it here:

Air France-KLM CEO Meets Alitalia Investor Group

[aleaz]

Thank you Warff.
What is going on here is a big mess and pilots managed to get out somehow...with dignity but both legs braked!
The governement is trying to cancel in Italy all minor professional unions and just have 4 big ones that should be representative for every type of worker: from factory workers to pilots! This big unions actually represents only 20% of Alitalia ground workers.
CAI wanted a pool of 9 people to discuss a single contract for ground workers, employee, flight attendants and pilots. Those 9 people are elected by all the 12500 new Alitalia workers and pilots are just 1550! That means that our contracts would be discussed by a employee, for example.
Unluckly this deal was immediately signed by 3 of the 4 big unions: infact on 3250 people that would go home, only 600 were from ground, and also their wages and contract was the same.
The 4th big union decided they could not sign as they didn't wan't to decide for the other 80 % of Alitalia workers, whose unions weren't even received by the governement and CAI.

Infact, that night, only the big unions could partecipate at the debate while pilots unions and flight attendants' were left in the street. Also they moved the place of meetings to avoid all pilots and flight attendants that were gathering for a sit-in.
When our representative was about to promote a stop of every flight op, CAI and governement decided to talk with us: but it was a take it or leave it.
And the deal was 1000 pilots home, 1600 flight attendants home, 600 ground workers home ( doesn't it sound strange for a company that makes money FLYING), a contract that seems slavery and 20 to 30 % cut on wages (our were not so high even before).
They said initially no.

After 20 days of lies about us on newspaper, television and internet, all manipulated by politicians, pilots were the ones who wanted Alitalia to fail only to mantain wages and privileges.

Then the 4th big union signed and we were left alone.
So, to make it short, we signed but they could only obtain that captains had a manager contract (just to have our representative unions) and that pilots contract would be, apart from money, the same of captains; and they obtained 150 pilots more with one month off for everyone.

It's really a mess, one of those mess that only Italy can give birth to, and God knows how we will be able to get out.
In the weeks to come we will be able to change something about our contract, but not a lot I guess. In the meantime 870 pilots are at home and this new company to me has less chances than the old one.
We will also be merged to Airone: none says it but they was closing down. It's just that they have the "right" friends and none would tell.

So also none of their pilots will go home and if I stay I'll have on my left a captain with 4 years of flight or so, while after 8 years of Airbus 320 I'll be a first officer forever.

Alitalia was a good company: the only big problem we had was that we paid every service not at market price becouse someone had to gain money: for example air france paid around 800 euro for a turnaround in fco, while alitalia paid 1200. We paid around 5000 euro for a turnaround in Pantelleria, while the othes paid 4000. And these are the ones we know for sure........

Sorry this was so long.

[pee]

Somewhat predictably, Ryanair just rattled its saber at AZ and announced today that it had submitted a formal complaint to the EU Commission regarding "the latest unlawful bailout" of Alitalia.

"This is the latest and perhaps most blatant example of the Italian government doing whatever it takes to protect their failed airline," said Ryanair's Jim Callaghan in a statement.

"It is also the second time that they have used the trick of simply shifting debt out of the airline and into a subsidiary in order to keep the airline afloat."

Nevertheless, he barely believes in the effectiveness of their own gesture, adding: "Despite the blatant nature of the Italian government's breaches of the EU state aid rules, we have no doubt that the EU Commission will again rubber stamp this unlawful bailout."

Any comments?

[philipat]

Call A Spade a Spade

Alitalia was a good company: the only big problem we had was that we paid every service not at market price becouse someone had to gain money: for example air france paid around 800 euro for a turnaround in fco, while alitalia paid 1200. We paid around 5000 euro for a turnaround in Pantelleria, while the othes paid 4000. And these are the ones we know for sure........

Most of us call this corruption and it is the ONLY reason, paradoxically, that AZ is still flying. If it fails all those sources of income and concessions are gone, which is why the politicos have been using taxpayers money to keep the money recycling back to their own pockets. The new rescue is just another cynical attempt to dump losses, accrued debts and retrenchment costs on the State (Aka the taxpayer) and buy the good assets cheap.

This is unfortunate BUT the fact is AZ, for a combination of all of the above issues, never has and never will be profitable. Some in this forum don't seem to understand that a Company is in business to make money for its shareholders. If it doesn;t it should go out of business.

The best option for AZ would have been a sale to AF/KL (Or another foreign entity with better internal controls and less tolerance for corruption) which is PRECISELY why Uncle Sylvio and the boys don't want to cede control. The Unions rejected this approach and I, therefore, have no sympathy.

You also omitted to recognise in your post that AZ, like most Government Organisations anywhere in the world is grossly overstaffed and has very poor productivity. Put this beneath levels of corruption and there really isn't much hope.

I rest my case.

[aleaz]

you just say that becouse you know and have facts to show me or you say that becouse you think it is the thruth?
Many of my collegues on long haul flights were stopped in november becouse they reached 900 hours.
Before they grounded the aircraft ( and not becouse they were empty!) from may to october we were flying 90 to 95 hours a month and 65 in the others.
Alitalia made money like the other but used it not for the right thing.
Is it my fault?
You have no simpathy for me becouse others was throwing away all my work and now I must go to hell with them?
I do not understand.....

[philipat]

Nothing Personal

You have no simpathy for me becouse others was throwing away all my work and now I must go to hell with them

BUT, the Unions (Your Representatives?) should have recognised an opprtunity to transition to better management and the need to make concessions to reduce excessive jobs, in the greater interest of the majority.
My comments, incidentally,were not intended to single out the pilots where there is probably less overstaffing.

You should see this as an opportunity to create a better future for yourself and your family and join a more efficient and secure carrier. It's not the end of the world and I guarantee that the sun will still rise in the East tomorrow morning? Go East young lady?

[Raas767]

I wonder if Air France KLM is interested in bailing out the American financial system.....

[TopBunk]

I have heard a rumour that the AZ pilots not taken into the new company will receive 80% of basic salary for 7 years as compensation

If true, I'm not surprised they signed up to it. The financing of it must make interesting reading.

[Re-Heat]

I can't believe that would be realistic - that sounds like the package they probably demanded last month from the union side, but hardly what AF would ever consider offering.

[philipat]

Yes/No/Yes/No...............?

philipat
you have no clue of what you are talking about.

Yes I do..
No you don't...
Yes I do..........

Doesn't really add much to the debate?

I have been very succesful in business over many years at the CEO level including experiences working with Unions and Governments in difficult re-structuring situations. Based on that experience, I am simply expressing an opinion, elucidated accordingly.
You are, of course, entitled to express your own opinion in such an open forum. But, as the old Monty Python sketch went, an arguement is not just simply saying "No it isn't".
If you have anything to contribute please state your case.

[philipat]

Viva Alitalia!

I have heard a rumour that the AZ pilots not taken into the new company will receive 80% of basic salary for 7 years as compensation

If true, I'm not surprised they signed up to it. The financing of it must make interesting reading

That's the whole point. The Italian Government (aka the taxpayer) gets to absorb all the bad assets, acculutaed losses and retrenchment costs, which explains the 2 Billion Euros price tag. Coversely, Uncle Sylvio and the boys walk away with the good assets at a discount, then start to cash out immediately by selling a minority stake to LH at a marked up price. All this so that this national treasure can remain in Italian hands, which is simply a red green and white smokescreen to appease the masses.

The bailout (Calling a spade a spade) of 2 Billion Euros, the third such bailout of Alitalia, is also against EU law and explains why Ryanair have registered a formal appeal to the EU.

[lc_aerobatics]

Ryanair.com - News : Ryanair Launches State Aid Complaint Against Latest Unlawful Alitalia Bailout

MOL trying to expedite process.

[navigante]

Myth-busting

You also omitted to recognise in your post that AZ, like most Government Organisations anywhere in the world is grossly overstaffed and has very poor productivity.

BUT, the Unions (Your Representatives?) should have recognised an opprtunity to transition to better management and the need to make concessions to reduce excessive jobs, in the greater interest of the majority.

With all respect Philipat, in common with most other posters here you've fallen for the oft-repeated lie that AZ's problems lie in overstaffing and bloated staff costs. This mantra has been repeated so often (by successive Italian governments, AZ managements and immediately parroted by Italian/world media) that it has become a cliche'; too bad it's DEAD WRONG.

It's a bit like blaming the loss of a war on the troops, instead of the the generals. Facts:

-AZ has a lower employee/aircraft ratio, as well as a lower employee/pax carried ratio than AF, LH, IB or even BA. These employees are, on average (especially on the sharp end) paid less than in other european majors (although BA comes close). Fact.

-AZ's cost of labour has recently been below 20% of total operating costs, while LH/AF/BAs is and has always been well above 20% (from respective 2007 yearly reports). In fact the only overpaid AZ employees are its top managers, who in the last few years have been paid more per year than LH/AF CEO's COMBINED. Fact.

-AZ's yearly losses over the last few years (pushing 600 million euros a year recently) have even exceeded the total cost of labour: in other words, even if ALL of AZ staff (from their cheapest new-hire temp to their grossly overpaid CEOs and managers) were to work FOR FREE, AZ would still end up posting a loss at the end of the year (still think AZ's problem is staff costs and productivity?)

During the process of considering a takeover of AZ in March this year, even Air France's CEO Spinetta publicly noted that contrary to popular wisdom, AZ's staff costs were not its problem.

Don't get me wrong, there are certainly improvements to be made in AZ's staff costs and numbers (and especially in some staff's attitude to customer relations), but blaming AZ's demise on staff numbers/costs is like blaming a cold for the death of an AIDS patient; sure, the cold got him in the end, but he sure as hell wouldn't be dead from a cold if he didn't have HIV.

[philipat]

Navigante

I actually agree with most of what you say. If you would care to read the full thread I have noted in my earlier posts that there have been multiple reasons for AZ's problems.
My issue, as I have tried so hard to explain is from a pure business perspective. Any unprofitable business in any country in any type of business cannot and should not survive. Period.
The reasons for the inability to be profitable are secondary and should be the responsibility of Management to resolve. It is unreasonable to expect taxpayers to continue to provide subsidies to extend, in a seemingly endless manner, the life of a perpetually unprofitable business.

Most AZ staff also seem to understand the true nature of the reasons behind the inefficiency and I would suggest, again, that this should been all the more reason why the Unions should have represented the best interests of membership in agreeing to the earlier AF/KL deal, including the necessary staffing reductions. This would have transitioned management to a more efficient and less corrupt regimen and would have addressed the true nature of the problems, with the vast majority retaining their jobs.

There comes apoint where you (Employees and Unions) can only do so much. If an intransigent and/or corrupt management and/or political environment is insurmountable, there are 2 choices. Either you dig in and destroy (Ultimately not very productive) or you look outside the box and explore creative possibilities for change. Including changing the biiger picture, like a new. more responsive owner, accepting that there must be certain sacrifices.

My interest in this is purely intellectual and in terms of a case study like for Business School study purposes. I have no ill-will toward anyone in AZ, or towards Italy or Italian people and I have no axe to grind against AZ (Except, perhaps, I confess, that I was once stranded in Rome by an Alitalia cancellation on a Christmas Eve which did leave a taste in my mouth which I would have preferred to have been from roast turkey with my family in Bangkok, where I lived at that time).

[eu01]

The comment written by WAPA, World Aeronautical Press Agency

According to some analysts, Ryanair claim has bases of legal credibility. In this way it is difficult to support that there is not continuity between the old and new Alitalia. It is not enough to change name. Because in the old Alitalia, the negative aspects remain frozen, while the positive ones come transferred in the new Alitalia.

Experts wonder how it is possible to pass to new Alitalia some services granted like slots or traffic rights granted on the base of international agreements and assigned with a call for bids. How is it possible to recognize judicial continuity to a labour relation, and not to recognize it to another one? How is it possible to cancel some rights granted that were part a contractual domain of general character? Sooner or later it will happen that some employees lodge an appeal to the authority and, as happened in the past, if that appeal will be upheld all labour relations have a continuity recognition in the new Alitalia, that is CAi (Compagnia Aerea Italiana). So, the castle of this new company engineering will fall down.

[el #]

Is there an interest in having this thread updated with news and hopefully a normal discussion to follow ?

For example the Italian Gov.mnt has approved to double some tax on tickets that shall go in part to airport and in part to a fund to protect unemployed aviation workers. And some details have emerged on the specifics of CAI plans, including strategy, projected fares, etc.