Alitalia nears bankruptcy as staff rejects rescue plan

jimntx

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Jun 28, 2003
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Alitalia staff rejected rescue plan which would have eliminated a number of jobs and cut cabin crew and pilot pay rates by approximately 8%.

http://atwonline.com/airlines/alita...m=email&elq2=34777e9eab62439e9514246168e835eb

I can't say I'm surprised. Alitalia employees have always had the attitude that someone (usually the government ) has to come up with sufficient money to keep the airline running without a single job or lira of pay sacrficed by the employees.

When I worked for Texaco, I had several assignments at Texaco Italia in Rome. I'm a union member (APFA) now myself, But when I was with Texaco, all the managers in the Rome office were members of a national managers'union. Isn't managers union an oxymoron? There seemed to be so many strikes at Alitalia in those days that the company always flew us from Houston to Rome on KLM with a change of planes at Amsterdam. In the years I was with Texaco, I was booked on Alitalia exactly once (no other choice on a tight schedule at the time) because the company didn't want us to be stranded somewhere en route.

If Alitalia goes into BK, it may very well be the end of the airline because Alitalia's financial partners (I think Etihad is one) have said that they will not provide further funding if the employees reject the reorganization plan.
 
The Alitalia name had (I say had) great brand value but now after so many crises I believe this name should just go away. I used to be a large client of AZ and wanted them to succeed but enough is enough...
 
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I agree with you. Even us yellow-dog Democrats recognize that there is a point at which the employees of a company must make sacrifices (coupled with strict management which has never really been true of AZ) to keep the company in business. However, I suspect that in the end the government will put up the money to keep AZ flying for the time being. There's the national ego issue to be dealt with--i.e., being the only Western European country (other than nation-ettes like Lichtenstein, Monaco, and the Papal state) without a flag airline.
 
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Update: Alitalia entered Extraordinary Administration--equivalent to Chapter 11 in the U.S.--today. Unless something really unexpected happens, I think this may be the beginning of the end for AZ. Etihad has made it quite clear that they are not going to put any additional money into the effort to save AZ.
 
Update: Alitalia entered Extraordinary Administration--equivalent to Chapter 11 in the U.S.--today. Unless something really unexpected happens, I think this may be the beginning of the end for AZ. Etihad has made it quite clear that they are not going to put any additional money into the effort to save AZ.


Jim you couldn't have been more correct. They are now up for sale. Wondering at this point if any of the LCC's over there would step up and purchase AZ. More than likely just to get the routes and gates and then dismantling the rest. You hit the nail on the head, good call.

Italy puts Alitalia up for sale. Does anyone want to buy it?
 
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As there are still too many airlines in Europe for the amount of business, I would be surprised if anyone steps up to purchase the airline itself. Perhaps some other airline might want some of the aircraft--though part of the reorg plan that was rejected was to eliminate most TA and other intercontinental routes and widebody a/c and focus on LCC domestic and short-haul European routes--a market that has a glut of airlines in it.
 
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Yahoo strikes again. The link that swamt posted from Yahoo had another link to most of the story embedded after the first paragraph. The first paragraph is still there, but the embedded link no longer works. Mostly it was a discussion of the fact that the European flag carriers were once symbols of power and prestige, but they have all struggled for years to compete with the LCC and Ultra LCC airlines which abound in Europe.

However, the Yahoo article did mention that the Italian government has put a 15 day deadline on offers to buy the airline (none of which has materialized so far). Evidently even the government is ready to stick a pin in AZ and declare it done, and they don't want to waste time doing it.
 
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I can't say I'm surprised. Alitalia employees have always had the attitude that someone (usually the government ) has to come up with sufficient money to keep the airline running without a single job or lira of pay sacrficed by the employees.

. There's the national ego issue to be dealt with--i.e., being the only Western European country (other than nation-ettes like Lichtenstein, Monaco, and the Papal state) without a flag airline.

As one could expect, the Italian government has extended a "bridge loan" to AZ to keep it operating until November. What then? The Finance Minister said he was opposed to "re-nationalizing" the airline because he didn't want the Italian public responsible for the "burden" of Alitalia. IIRC, AZ has been "nationalized" at least twice in the past.

http://atwonline.com/airlines/italy...m=email&elq2=5316ffd364bf4060b3715f1a74a4c28d
 
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Maybe it is time to just let go and let the market work itself out. It would benefit the other airlines as their passenger LF's would increase.
 
Well hopefully this link will remain. Another story about AZ. What stands out to me is where it states the employees were "hoping" another bailout would come. Another bailout might have came IF the employees would have voted in the restructured contracts, now I think that it's too late. Costing the tax payers too much and still losing 1 million per day with dept outweighing assets by 1.4 billion...

Crash landing: Alitalia
 
There's the national ego issue to be dealt with--i.e., being the only Western European country (other than nation-ettes like Lichtenstein, Monaco, and the Papal state) without a flag airline.

Letting AZ brand die might be the path of least resistance.

Just in the last 20 years, in addition to the Italian government bailout(s) for various restructurings, AZ had alliances/business ventures basically every SkyTeam airlines. None have worked. The Etihad ownership is not working either. Turn the lights out. Likely the LCCs (easyjet, ryanair and maybe a couple smaller ones) will easily step in to fill the void. LH and AFKL will gladly pick up the AZ frequent flyers in places like FCO and LIN/MXP.

RE: the flag airlines
It's no big deal. There are a lot of countries in EU without really their own flag airline. Realistically, they're all owned by the Germans/LH (Switzerland, Austria, Belgium), Frenchies (AFKL) or the Brits (IAG).
 
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Letting AZ brand die might be the path of least resistance.


RE: the flag airlines
It's no big deal. There are a lot of countries in EU without really their own flag airline. Realistically, they're all owned by the Germans/LH (Switzerland, Austria, Belgium), Frenchies (AFKL) or the Brits (IAG).
You know that, and I know that, and anyone who follows the airline industry knows that, but the average person doesn't know (and probably doesn't care) that (pick your poison) KLM is not owned by the Dutch and AF is not totally owned by the French. As long as the name exists, the average leisure traveler will think of Alitalia as being Italy's airline and British Airways is Great Britain's airline, etc--whether privately or publicly owned. Thus, the temporary bailout "loan" from the Italian government to AZ to keep them flying until November. Why? If the Italian government actually got repaid for all the "bridge loans" they have made to AZ and the money the government put into AZ during periods of nationalization, the Italian government would be financially set for awhile.

But, you are right. The Italian government should just let the AZ brand go. But then, as I've said before...after 5000 years of fighting between those Semitic first cousins there should be peace in the Middle East, but there's not.

Let me add that I have flown Alitalia twice in my life. The first time was on an MD-80 from Rome to Amsterdam. One of the most discomforting flights of my life. This was back in the 1980's. There was only a curtain covering the entrance to the cockpit--no solid door. The curtain was tied back the whole time. Being able to see all of the rather steep descent into Schiphol (sp?) airport was too disquieting. And, there was no service at all other than 1 beverage.

The second time was Rome to EWR at the end of our last cruise before my wife died. We were in the last row of the airplane, and the guy in front of me had his seat reclined into my lap practically. I will give the f/a this. He made every attempt (but unsuccessful) to persuade the guy to raise his seat up at least a little. Again, the service (food and drinks) did not make me feel like I was on an Italian airliner. I had the feeling that the f/as felt we passengers were the major impediment to them enjoying the trip. Italy is one of my favorite countries in the whole world. Alitalia is not my favorite airline.
 
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Italy is one of my favorite countries in the whole world. Alitalia is not my favorite airline.

It is interesting that AZ could not somehow manage to make a profit from such a popular vacation destination as Italy. Not just Rome. Granted, it is heavily seasonal, but somehow AZ should have been able to figure out how to make some profit on the tourist traffic to Italy in the summer and then at least break even the rest of the year.
 
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Just saw on another website that the Alitalia special commissioners (managing what we call bankruptcy) have invited bids for sale of the airline. Didn't post a link because site requires you to register (at a cost) to get more than the first paragraph or so of the article. Earlier news article said that they are limiting the offering period to 15 days. If no buyer, no AZ.
 
I haven't heard of any rumors or even anylist trying to guess who would be good for a bid. You may have hit it again about too many airlines over there and they (airlines) will just let them go and see if they can't just pick up the leftover scraps after the fall out. I assume you read the entire article, do you have the end date? Or is it 15 days from yesterday?
 
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