Alitalia files for bankruptcy

[Mattg]

It seems that Italy's flag carrier and Virgin Australia partner Alitalia has finally run out of money and is going into bankruptcy proceedings.

Apparently Alitalia flights are still operating as scheduled (for now).

Italy's troubled flagship airline Alitalia will formally request to enter bankruptcy proceedings, after workers rejected a restructuring plan.

The company said its flight schedule would continue to operate as planned, while administrators examine whether the firm can be turned around.

Alitalia has received more than 7bn euros (£5.9bn) from the Italian state over the last decade.

But without further support, it may end up permanently grounded.

Last week, airline employees voted against a plan to cut jobs and salaries that would have allowed it to secure new funds.

Alitalia said in a statement that Italian shareholders and Etihad, the Abu Dhabi airline that owns 49% of Alitalia, had been "committed to recapitalise and finance the plan with 2bn euros", but that without the approval of workers, it could not go ahead.

Alitalia to enter bankruptcy proceedings - BBC News

 

[anat0l]

Well, Arrivederci Alitalia...

Interesting how there appears to be some public opinion of note that says that the carrier should be left to fail.

Actually, how can the state "bail out" the airline? I thought part of being in the EU is that carriers (or other large organisations) were not permitted to be aided financially by the state. Isn't that how Malev got into the soup (and ultimately met its demise)? Anyway, that's a very naive understanding of the rules.

 

[JessicaTam]

I wonder if anyone will pick them up in a 'fire sale'?

 

[defurax]

I almost feel bad! Last year I was status matched to Freccia Alata Plus and I've never flown AZ, but they still had to pay for my visits to DL and AF lounges...

 

[Mattg]

I wonder if anyone will pick them up in a 'fire sale'?

I heard Lufthansa Group was considering it.

 

[Melburnian1]

Would past union agreements including any purchaser having to pick up liability for 'historic' on costs (European equivalent of superannuation is one) be a hindrance?

This carrier may not have made a profit for a long time. The general view of other operators may be that it's best left to sink, as Ansett Australia was.

 

[Denali]

My first thought what, "Again?".

As much as I have parental instilled pride in the airline, my expectation on flying them would be low as Ive read so many negative things about the airline and staff.

So what now, VA, in regards to partner airline? Wish VA would join an Alliance or pick up a couple of more useful partners.

 

[AviationNZ]

How much influence have Etihad had in their operations/management over the past few years? They were 'meant' to come in and save the day from what I recall!

 

[anat0l]

How much influence have Etihad had in their operations/management over the past few years? They were 'meant' to come in and save the day from what I recall!

Well EY had (has) money, so in as so far as a "savior" goes, when EY came on board, $$$ was probably the sole thing on the forefront of the minds of AZ management.

AZ have been given a new product since EY took an interest. AFAICT they also got some codeshares with EY, and since they also linked up with VA, I assume them as well.

It would be interesting to hear why it all hasn't translated into anything tangible. Could it be a result of the weak travel demand at the moment (i.e. every airline has been affected; some airlines are hypersensitive)? Some might blame the unions for being unreasonable.

 

[TomVexille]

Would past union agreements including any purchaser having to pick up liability for 'historic' on costs (European equivalent of superannuation is one) be a hindrance?

This carrier may not have made a profit for a long time. The general view of other operators may be that it's best left to sink, as Ansett Australia was.

I suspect that if anyone does pick it up, it will be operated like OS with flights operated by a different subsidiary on new contracts.

 

[vmile]

Well EY had (has) money, so in as so far as a "savior" goes, when EY came on board, $$$ was probably the sole thing on the forefront of the minds of AZ management.

AZ have been given a new product since EY took an interest. AFAICT they also got some codeshares with EY, and since they also linked up with VA, I assume them as well.

It would be interesting to hear why it all hasn't translated into anything tangible.

I had the 'joy' of flying AZ last month, both domestic and international sectors.

My observation of what EY brought to the table other than money-

A new CEO and team.

A really nice lounge at MXP airport (Think nearly as good as EY First class lounges), with direct gate access.

Upgraded lounges at FCO and other ITA airports (fairly ordinary though)

New Uniforms.

New looking web site.

I think one less Rome EY metal flight to AUH per day, sub to AZ codeshare flight.

EY codeshares.

The Web site looks fantastic. It just doesn't work. Makes VA's site look like a model of efficiency.

The MXP lounge is fantastic. AZ then decided that they would concentrate nearly all their Milan flights out of LIN.

Their IT system seems to be a real mess. FF numbers do not stick, check-in for all our flights, including those booked direct with AZ was a time consuming battle, as was getting into their Lounges 'I'm sorry, you do not show in the system...." was the standard excuse. Seat selection usually did not work, if available at all. When it did work, I tried several times to pay money for exit row seats etc- just did not work- I gave up. Extra bags, also a battle.

It seems that part of the EY plan, and the recovery package voted down by the Unions, was to turn AZ into a LCC for intra-Europe flights, and have International flights as a Full-cost airline.

The LCC path was already underway, no food on Economy for intra-Europe flights had already been introduced.

We had had several Easyjet flights the two weeks prior to the AZ local flights. I was impressed. IT/Web systems worked and a pleasure to use. Staff friendly and helpful. Planes full, got us there on time.

All the time on the AZ flights I keep thinking to myself, this is a full service airline going to turn itself into a LCC ????????.

It will be interesting to see what happens.

At the end of our AZ experience, I decided 'never again'.

Looks like I may not get the chance to make that call.

 

[ComeFlyWithMe]

Do you mean MXP (Milano Malpensa)?

AZ already run many codeshares with AF so they would be the obvious choice to take over the routes and operation.

 

[trooper]

Well EY had (has) money, so in as so far as a "savior" goes, when EY came on board, $$$ was probably the sole thing on the forefront of the minds of AZ management.

AZ have been given a new product since EY took an interest. AFAICT they also got some codeshares with EY, and since they also linked up with VA, I assume them as well.

It would be interesting to hear why it all hasn't translated into anything tangible. Could it be a result of the weak travel demand at the moment (i.e. every airline has been affected; some airlines are hypersensitive)? Some might blame the unions for being unreasonable.

Yep...some would. Never mind that it was management that brought it to this point...(No? Then what were they doing?)... lets expect the rank and file to bear the financial burden of restructuring.... them refusing to effectively take the blame is clearly unreasonable.

Sad situation all round....but as already noted... not really the first (or second?) time...

 

[Mattg]

All the time on the AZ flights I keep thinking to myself, this is a full service airline going to turn itself into a LCC ????????.

Yep, but with the cost base of a unionised legacy carrier! That was never going to work.

They wouldn't be the first airline to try this though. Just look at British Airways.

 

[bobe]

I have a booking with them in July, any suggestions??????

 

[drron]

I heard Lufthansa Group was considering it.

They have said no.

German airline group Lufthansa said today it is not interested in snapping up troubled Italian carrier Alitalia, as Rome hunts for a buyer after workers rejected a bailout plan. “We are clearly not there to buy Alitalia,” finance chief Ulrik Svensson said during a teleconference with analysts on Lufthansa’s first-quarter financial results. Italian government ministers said Wednesday they would not oppose a takeover bid by the German behemoth, as they announced that Alitalia would be sold “to the highest bidder”.

Lufthansa says not interested in taking over Alitalia - The Financial Express

 

[Mattg]

I have a booking with them in July, any suggestions??????

What's the route?

At this stage flights still seem to be running, but perhaps you might consider buying a cheapie ticket on Ryanair as a backup? Or buying a refundable ticket on another airline?

 

[anat0l]

They have said no.

Lufthansa says not interested in taking over Alitalia - The Financial Express

Yeah can't really see Lufthansa taking up Alitalia. They're not exactly rolling in cash either, plus the Italians may not be happy with German overlords. Despite the German business acumen, I don't think they see enough tangible opportunities in Alitalia to take a chance on them.

Whoever the next suitor is, will likely be the highest bidder and then run the company as if it were funded by the lowest bidder.

 

[drron]

Yeah can't really see Lufthansa taking up Alitalia. They're not exactly rolling in cash either, plus the Italians may not be happy with German overlords. Despite the German business acumen, I don't think they see enough tangible opportunities in Alitalia to take a chance on them.

Whoever the next suitor is, will likely be the highest bidder and then run the company as if it were funded by the lowest bidder.

Cant see a bidding war coming.If they are lucky there will be 1 bid.

 

[anat0l]

Cant see a bidding war coming.If they are lucky there will be 1 bid.

Agreed. It's likely less a matter of trying to play off the potential suitors and more of trying to search high and low for someone to say, "yes". The current economic situation is likely not helping.