Can this plan really save Alitalia?

Firstly, a confession. I have a seriously soft spot for Alitalia. I would really like the airline to succeed. It has been close to extinction for many years now and Etihad’s purchase of part of the airline, and the fact that it is clearly pulling the strings, gives it the best – and only – chance of getting back on its feet. There was great anticipation in Italy for the announcement this week of how Etihad plans to achieve this herculean task. It has to be said that the announcement fails to excite.

The announcement began with remarks which suggest those responsible are not aware of the size of the task. It is all very well to talk about “returning the airline to profitability” and achieving that by 2017 and breaking even in 2016 but this ignores one rather important point. The airline was founded in 1948 and has made a profit in just one year since then. It is not a question of simply putting a few things right so the airline can be made profitable again – it never has been profitable so almost everything needs to be put right!

The announcement covered route strategy (a bit of tweaking but nothing major), a new brand identity, improving some services and cost control.

I certainly agree that new branding is needed. The current identity harks back to the glamorous Italy of the 1960′s. Italy has so much more to offer. It is also important that staff feel they are working for a newly reinvigorated airline and careful re-branding can achieve this.

New Business Lounges at the main Italian airports are also a good idea. Alitalia has seriously lagged its competitors in services offered to premium passengers. This alone will not solve the problems though.

Everything hinges on what is meant by the innocuous-sounding term “cost control”. Will this be a few euros saved here and there or will it be a top-to-bottom re-working of the organisation?

Etihad’s efforts to save Air Berlin have not worked so far. It is clear they seriously underestimated the problem and avoided the core restructuring that was – and still is – needed to make sense of the company. Will they make the same mistake at Alitalia?

Italy desperately needs some successful international companies to show the world that the country is far from dead. Europe also needs some strong airlines. It would be good to see a new Alitalia succeeding. Maybe the report for public consumption is just a shadow of the real plan but, if it is not, I fear this could be one long, and painful, disappointment.

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