According to a director of Alitalia, the Italian airline company, Alitalia, is almost dead. Alitalia can only survive a month.
The director asks the Italian government to intervene. He says that the fault lies
by the control of Alitalia. They had should begin earlier with new
savings.
On the end of 2003 reported the airline a new plan, 2,700 staffmembers had to be fired.
But that plan has been removed after a trade union protest.
Last week Alitalia had reported the most badly annual notes since the start of the airline.
They're doing not very well now. I hope they can join skyteam as rescue, before they are bankrupt.
When a CEO says that his company is "almost dead" and at the same time asks the government to intervene I get teh feeling that in reality the CEO is a) trying to get concessions from its employees and b) wants money from the government for his expansion plans c) wants to be privatised quickly in order to merge with AF/KL and/or d) is desperate for a success to increase his pay check. I have to come across the CEO of a publicly traded company (Alitalia is listed on the Milan exchange) who questions its continuity. If so, the Alitalia auditors must have been in another world when they signed the 2003 annual reports and/or audited Q1 2004.
Maybe I've missed something but didn't Alitalia receive the amount of EUR 250 million from KLM last year???
I really hope that what you say is true! I'm booked on AZ, and want to avoid a whole rebooking mess (probably at my cost when AZ goes bankrupt). And besides this egocentric reason, it would be sad for the AZ employees (although I see a lot of simillarities with Sabena: incompetent management, too much power from the Unions etc etc).
Berlusconi recently announced that AZ wants to expand by acquiring 10 new B777's, and 10 new B7E7's. Strange when you hear 2 weeks later that the airline will go bankrupt within 4 weeks when they will fail to make a new restructury plann.
LJ wrote:Maybe I've missed something but didn't Alitalia receive the amount of EUR 250 million from KLM last year???
Yes they did. But I don't know exactly why. But probably it wasn't enough or the money burned a hole in their pocket, and they spent it. So as you can see the results of 2003 are not the best. Here is a press release in italian ( for the ones who are interested) But you can translate it by a online translation machine. I got my information from the VRT-teletext.
But no suprise...
Is this the last call for help... before the "big bang".
Like Sabena, Alitalia is making loss, even in the good old days...
In the current time an airline can't work like Alitalia is doing now.
To much employees, to much costs... not flexibel and with their head in the clouds. It's going very wrong...
They are looking for a member Air France/KLM ticket to get a financial injection but I doubt that Air France/KLM will do this. Why should they take a sick airline into their alliance ? For the moment they are saving each other (Air France --> KLM).
(That's why I don't understand that oneworld took Swiss into their alliance ????? )
But like I always say, the future will bring us the answers...
I hope the best for Alitalia and their thousands of employees.
Berlusconi recently announced that AZ wants to expand by acquiring 10 new B777's, and 10 new B7E7's. Strange when you hear 2 weeks later that the airline will go bankrupt within 4 weeks when they will fail to make a new restructury plann.
... and they also just started with taking delivery of brandnew EMB-170's
ATC wrote:(That's why I don't understand that oneworld took Swiss into their alliance ????? )
Oneworld needed a feet in the german-speaking market, as Star controls the German (Lufthansa) and Austrian (Austrian Airlines Group) market... It's not for Swiss, but it's against Lufthansa...
As ATC already mentioned, if AZ think they can get money out of KLM/AF they must be dreaming. I can't imagine that Leo van Wijk (CEO of KLM) is "giving money to AZ after all what happened during the KL/AZ joint venture. Anyway, British Airways has already asked for an investigation by the EU Commision against government help in AZ. Needless to say other airlines (except Skyteam members) will follow if AZ get its money from the government.
Regarding Alitalia's position. I seriously want to know why the CEO issues such a statement. Does he really think it will help? I know that nobody will book a AZ flight for departure after the deadline just because they fear the worst. This means less revenues which means higher losses which can lead to bankruptcy even if this could have been avoided.
BTW Flying Dutchmen, AZ received the money because KLM cancelled the joint venture between AZ and KL.
ATC wrote:They are looking for a member Air France/KLM ticket to get a financial injection but I doubt that Air France/KLM will do this. Why should they take a sick airline into their alliance ? For the moment they are saving each other (Air France --> KLM).
A few remarks here:
1) Alitalia is already part of the SkyTeam alliance. What they want is a merger with AF/KLM. Before accepting them, AF and KLM have said that they must clean their balance sheet. That's why they are crying for money and restructuration. I am not sure it will happen...
2) AF and KL are not saving each other. Air France is helping KLM now (AF 2003 profit: €100 million: KLM 2003 loss: €400 million). So much for the Dutch pride
After the Parmalat affair, I don't think that the Berlusconi government will want to face another dramatic social drama. They have enough on their hands with the pensions problems.
Above that I don't see that another European Country will let down his national carrier. They will find ways, be it openly or under the table and they will say a big F... to Miss Loyola de Palacio. Each and every Country is helping or trying to help their national carrier, most of the time in a disguised and very intelligent way.
Alitalia needs to be purged and cured and agitating the flag of bankruptcy is probably a good mean to try to scare the unions and the employees. But as we have seen it in the past, it is difficult to accept and see a cut in his personnal privileges.
Frankly, I do not see why a structurally flawed operation like Alitalia should be saved at any cost.
Firstly, I do not see how the Italian government could do anything to inject badly needed capital into the company. Not allowed under EU-rules, but unfortunately it always takes ages for the EU to enforce its own rulings. Take the story of Olympic Airways for example, where I believe the Greek government acted also in breach of EU-rules. I wonder how long it will be before we see a ruling there.
Secondly, the Alitalia story displays many similarities to the history of Sabena. The trade unions appear to play an equally destructive role here. How long did it take Sabena to take urgent measures (downsizing)? Too long, the company went bankrupt before anything could be done. Whilst I have nothing but praise for Sabena personnel - I think they were an excellent airline - the same cannot be said about the trade unions and the politicians who were happy doing nothing as shareholders when their company embarked upon a dangerous course (fleet renewal, dodgy Swissair politics). Alitalia looks more and more like Sabena revisited if you ask me.
You might be right Dave, but IMO the main difference is cultural and institutional.
While the Belgian government is split to the point where they didn't even have enough national pride left to try and save Sabena, other countries fortunately still do!
See how Aer Lingus and Olympic were saved in extremis...
And Luc's point is very good. The Berlusconi administartion can't afford to have Alitalia going down and I strongly believe they will take the necessary measures!
vflies wrote:The Berlusconi administartion can't afford to have Alitalia going down and I strongly believe they will take the necessary measures!
... like split the company into a profitable business, with the aircraft, the flight crews, etc, and another one dubbed "Bad company" for all the money-losing activities. The latter one would go bankrupt, but who cares.
Although the government denies it, the idea is floating in the air.
it's since a few years that Alitalia is nearly bankrupt, but in some way,
the always survive, so lets hope that they'll survive, but I guess it will
be very difficult for them.
Don't they cooperate now with Air France
BMO wrote:Don't they cooperate now with Air France
Welcome to Luchtzak, BMO.
Yes, indeed, Alitalia has an extended codeshare agreement with Air France. It was authorised yesterday by the European Commission (see Luchtzak Latest News).
I think that the Italian government will give some financial assistance to Alitalia, because I can't imagine what Italians and people traveling to Italy, would do without Alitalia.
Why is Alitalia taking delivery of new Embraer 170s if they are on the verge of bankrupcy?
In my opinion, bancrupcy would be the best thing for Alitalia. Yes, it would hurt many people, and yes, it would hurt the italians right in one of their most vulnerable spots, their pride, but you can't go on with carriers that don't do anything less then making losses.
They then can make a more modest, but profitable company, according to the example of SNBA. I sincerely doubt that they will sudednly be able to make the existing Alitalia suddenly profitable.
People travelling to Italy and Italians that travell would be transported by other carriers. There is Volare for example, but also many other carriers would expand their routes and frequencies.
In my opinion, the split in 2 companies, the profitable one and the bad one, won't work. Otherwise they would have done it already before. Don't forget that often you can't disconnect debts from the "healthy parts" so easily. The companies that where Alitalia has debts also have their rights, and they will fight for those rights till the bitter end.
Personally i didn't regret for a second that Sabena went bancrupt. It teached some politicians a valuable lesson: you don't use taxpayers money for your own ego ("oh look, we have a great national airline...") and it made a company that was almost never profitable during 70 years convert into a much smaller company (SNBA), but one that is profitable! Also the bancrupcy showed unions that they aren't better of with striking all the time. (At least when you gain much less, you still gain something while you can search for another job if you don't like this one). Sabena was a good lesson that everyone here in Belgium needed, and personally i think Italy could use a same lesson.
But do i think that they will go bancrupt? As been said before, the stakes are so high for Berlusconi, and he lacks the rules of the EU anyway, so... make your conclusion...
I hope the best for Alitalia and their employees, but i fear the worst (either for them, either for the taxpayers in Italy, but someone will be screwed)
I hope they can join skyteam as rescue, before they are bankrupt.
Why is Alitalia taking delivery of new Embraer 170s if they are on the verge of bankrupcy?