No buyer, no Alitalia?

What happens next for Alitalia?

The Italian carrier has seen its suitors drop out one by one: Aeroflot said no, Lufthansa-backed Italian carrier Air One said no, and MatlinPatterson, a US firm, was the last bidder - and it too said no. That leaves, well, nobody to bid for Alitalia, and it leaves the Italian government in a bit of a bind: it is under some pressure to solve the problem - especially when the 'problem' is losing 2 million euros ($2.8 million) a day. "When something is diseased, you need to amputate it," said Infrastructure Minister Antonio Di Pietro. But on the other hand, the Italian government has come under fire from the unions and opposition groups for the collapse of the seven month-long sale, and the current quagmire is not making it look any better.

Why aren't there any interested bidders? A major reason: the terms and conditions imposed upon the potential buyers by the Italian government. A buyer wouldn't be allowed to cut as many of the 20,000 employees as it wants to, for example. The dual hub system, at Milan and Rome, is inefficient, especially when Alitalia's competitors only have one (e.g. Lufthansa, British Airways, Air France, etc.) And labor unrest is a major discouraging factor - in fact, 100 Alitalia flights were canceled yesterday as some of its staff went on strike. Who knows, though - maybe the government's threat of liquidation might scare the unions into not striking. And there still might be bid in the future - the Italian government has said that it might directly contact some of the former bidders to strike a deal, since it is (understandably) seeking to get out of this mess (and to sell 39.99% of the airline, even though it could sell up to 49.9%). And Alitalia, Air One and MatlinPatterson have said they might be interested in buying - if the government relaxes some of its regulations. The newspaper Il Corriere has said that the Air France-KLM group might be interested, even though a spokesperson for the group said that the Air France-KLM would not be interested in Alitalia unless it is restructured.

In any event, it's up to the Italian government now to make the next move. I'd be interested to hear the opinions of The Airline Blog readers - do you think Alitalia, the historical flag-carrier of Italy, should be saved? Or is enough, enough - should it just liquidate (and maybe start over)?

4 comments:

Anonymous said...

I personally think that the Italian government (as socialist as it is) should wake up and smell the coffee....that their regulations are too strict....they need to cut some slack...sure the unions might scream bloody murder but with a restructuring i think things could change and do they have a choice. It's the national airline it won't go away without a fight. Even so if it does there are so many flights to places around the world from Milan and Rome by all the other airlines the gap might fill easily

Anonymous said...

Alitalia Should be saved and the Italian Government should make a law that Alitalia is going to be the only airline able to enter the country this would bring allot of buisness to the company the Italian government is doing the right thing because the people of Italy love the airline because the flight attendents and piolets speak Italian and know the coulture and the ticket causts are a reasonable price to take a transatlantic flight on. Alitalia SHOULD BE SAVED!!!

Claudio said...

A new operating company for Alitalia named "Compagnia Aera Italiana" has been established and it is lead by Piaggo CEO Roberto Colaninno. The operating company's funding comes from 16 different Italian investors who want to keep Alitalia alive.

Compagnia Aera Italiana is still looking for international investors, German Luffthansa is still rumored to get involved - as published on www.dvz.de

Anonymous said...

^^Thanks!!

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