Sharp minds at Alitalia

Alitalia are in deep trouble. They have struggled to complete a €300m capital increase with one of their major shareholders, Air France/KLM, very reluctant to get involved. It looks highly likely that Brussels will want to investigate whether some of their new, government-linked shareholders were engaging in a form of back-door government aid by agreeing to the new capital. The airline has been burning through money at such a rate that it is anyone’s guess as to how long the new €300m will last.

The company’s bosses seem unconcerned. Their response to Air France/KLM’s lack of enthusiasm has been to say that they will now consider airlines’ in the Far East as possible partners – as if this is some sort of beauty parade where Alitalia can choose the prettiest contestant. Underneath the bluff, it looks as if a degree of panic is setting in. Stories keep appearing in the Italian press with links to possible new investors – the stories have presumably been planted by Alitalia and are normally followed by a vigorous denial from the airline concerned. Even Aeroflot has been forced to state that the rumours of their involvement are false and there is “no way” they would become involved. Etihad was long-rumoured to be a possible saviour but their public response has been that they “are not a bank” – though this does not seem to have stopped Alitalia sending a senior manager to the Gulf in the last few days on what looks suspiciously like a last-ditch begging mission.

So, an airline deep in the mire with absolutely no friends in the market – and then Ryanair turn up on on the doorstep and offer a deal to co-operate on longhaul flights. Ryanair would fly passengers into Rome, where it has a large presence, and Alitalia would taken them overseas. Maybe not ideal, but surely better than nothing. Even if Ryanair did not put any actual cash into the deal, it would at least convince investors and the authorities that the airline was making an effort to turn things round.

Alitalia’s response to the offer was to turn it down without thought because, “We already have our own strategy”

And we know exactly where their strategy has led them in the past.

Air France/KLM have been increasingly outspoken about the somewhat arrogant approach of Alitalia management and their reluctance to produce figures and serious ideas. The unions, for their part, have threatened “war” if there are any redundancies at all.

Despite everything, I have a rather soft spot for Alitalia. It would certainly not give me any pleasure to see them disappear. Sadly, with management and unions equally reluctant or unable to face reality, the airline’s days look numbered.

 

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