Alitalia saved by the Government and reborn as ITA Airways

Join this forum to discuss the latest news that happened in the world of commercial aviation.

Moderator: Latest news team

Post Reply
airazurxtror
Posts: 3769
Joined: 17 Nov 2005, 00:00

Re: Alitalia again near bankruptcy

Post by airazurxtror »

Alla Lufthansa la Commissione Ue ha risposto con un no comment: al momento "esaminiamo l'aumento di capitale e seguiamo ogni sviluppo", ha detto un portavoce. Per quanto riguarda la critica di Lufthansa, secondo cui l'intervento di Etihad sarebbe un aiuto di Stato mascherato, fonti europee fanno tuttavia notare che l'articolo 107 del Trattato parla di "aiuti di Stato da parte di uno Stato membro della Ue", quindi non Paesi terzi.

http://economia.ilmessaggero.it/flashne ... 7946.shtml

To Lufthansa the EU Commission responded with a no comment; at the moment, "we examine the capital increase and we follow every development," said a spokesman.
Regarding the criticism of Lufthansa, according to which the Etihad move would be masked state aid, European sources note however that Article 107 of the Treaty speaks of "state aid by a Member State of the EU," so no by third countries.
IF IT AIN'T BOEING, I'M NOT GOING.

Inquirer
Posts: 2095
Joined: 14 Feb 2012, 14:30

Re: Alitalia again near bankruptcy

Post by Inquirer »

I think you'll see ALL major EU airlines file a protest at the EU in the coming weeks and rightfully so, IMHO. Even though the money Etihad wants to invest is genuinely theirs, their's definitely state aid involved here, even if it is 3rd party state aid this time.

Besides, if the principle of 3rd party state aid gets accepted by the EU, it sets the door wide open for all sorts of creative constructions in future: just one theoretical exemple, if I may?
Imagine EU country X wants to save it's national carrier but is barred from further injecting any cash into it. However, as we all know, it is allowed to give developing aid to non-EU country Y.
If country Y is subsequenty allowed by the EU to invests (most of) this money in country X's airline then,
article 107 of the EU Treaty has been nicely circumvented, isn't it?
What's there to prevent a whole stream of countries to go this path then?
Poland passing via say Belarus to save LOT? Malta via Lybia? Cyprus via Lebanon? And so on.

I think the EU better block non-EU airlines from investing in EU airlines if those non-EU airlines are majority state owned, just as it better blocks non-EU governments from buying into EU airlines all together: not to protect certain EU carriers, but simply to make sure all EU airlines can still compete on a level playing field in future too, one which isn't distorted by government subsidies, be they coming from within the EU, or -something new to the game- from outside the EU.

In the absence of that, we risk being catapulted back to the 1980s in no time, an era in which geo-political interests took priority over economic interests and which gave us an inefficient aviation industry, in which not the efficiency and the profitability of the company was determining to its longevity, but rather the determination of its sponsoring government, something which lead to very customer unfriendly and often monopolistic situations on many routes.

airazurxtror
Posts: 3769
Joined: 17 Nov 2005, 00:00

Re: Alitalia again near bankruptcy

Post by airazurxtror »

An interesting discussion of the case :
http://www.reuters.com/article/2014/02/ ... B220140206

Extracts :

Etihad has said it will only invest in Alitalia if it fits with its network, if Alitalia has a credible plan to return to profit and can bring it synergies.
"Any issues that may prevent the establishment of an appropriate business plan will have to be resolved to ensure the plan can be implemented to move Alitalia to sustainable profitability," the two companies said on Sunday.

Alitalia offers access to Europe's fourth-largest travel market and flies 25 million passengers a year. But the airline loses 700,000 euros a day and has net debt of more than 800 million euros. Alitalia completed a 300 million euro capital hike in December, which analysts said then would keep it flying for six months.

Etihad's stake-building strategy and its code shares with Air France-KLM also call into doubt the future of the traditional airline alliances - Star Alliance, OneWorld and SkyTeam, groupings that Etihad CEO Hogan has described as "fractured."
IF IT AIN'T BOEING, I'M NOT GOING.

Air Key West
Posts: 1107
Joined: 23 Jun 2007, 20:51
Location: BRU

Re: Alitalia again near bankruptcy

Post by Air Key West »

airazurxtror wrote:I think the EU better block non-EU airlines from investing in EU airlines if those non-EU airlines are majority state owned, just as it better blocks non-EU governments from buying into EU airlines all together: not to protect certain EU carriers, but simply to make sure all EU airlines can still compete on a level playing field in future too, one which isn't distorted by government subsidies, be they coming from within the EU, or -something new to the game- from outside the EU.
The EU (= the governments of the member States) have made the EU into the most liberal trade partner in the world. Now Barroso is saying : we must re-industrialise Europe. Our governments let practically the whole European textile industry to be moved to Asia and mainly to China. Try today to find a piece of garment REALLY made in Europe is nearly impossible. (the texile industry is probably the most extreme example, I know).
The Chinese and Qatari are heavily investing in (= buying) big parts of European companies or buying real estate in Europe.
The world of aviation is changing, too, and it's too late to stop the trend. It seems like four Near&Middle-East carriers will dominate aviation worldwide in the decades to come. Qantas has realised it already and swapped its partnership with BA for Emirates.
It will, however, be interesting to see what wil happen to the Big Four, if/when Chinese airlines really "take-off" and start to massively compete with the Big Four. China still has a cheaper workforce than for instance the UAE and the next aviation battle will be between them and China (Europe has already lost the battle, at least on the Eastern front). Three or four LCCs will dominate the European market and I don't know how (even big) European airlines will keep their long haul operations profitable.
Since State aid is prohibited in the EU, perhaps it is better that "State aid" from non EU countries makes it possible to keep jobs for European workers in Europe. What an irony !
If the Chinese are allowed to invest in the port of Athens, shipyards in the north of Portugal or more recently in Peugeot in France, there is no reason why Etihad would be stopped from PERHAPS saving AZ.
(Future will tell if the deal goes through). In short : Europe is no longer the center of the world. Traditionally, Europe was pictured on the center of worldmaps. On the new ones, Europe (and America) are moved to the sides and Asia (which includes the Middle East) is taking central place. Whether we like it or not...
In favor of quality air travel.

Flanker2
Posts: 1741
Joined: 05 Dec 2012, 23:15

Re: Alitalia again near bankruptcy

Post by Flanker2 »

China still has a cheaper workforce than for instance the UAE and the next aviation battle will be between them and China (Europe has already lost the battle, at least on the Eastern front). Three or four LCCs will dominate the European market and I don't know how (even big) European airlines will keep their long haul operations profitable.
That's a real possibility.

I hope that EY invests into AZ and realises that they bought themselves a way onto the Colosseum Arena and are surrounded by lions.

Italy can have a very prosperous airline, but it needs to restructure from the bottom.
In its current form, the aviation infrastructure of Italy is not sustainable for any Italian airline.
AZ can not be saved before this restructuring takes place and I want to see EY waste their oil money trying to save it. :lol:

The unions aren't the real issue, they are a result of financial problems caused by Italy's real issue: the hub problem.
MXP is too far from economic centers, LIN is too small and FCO is not suitable for an intercontinental hub because they are too far from the center of traffic of Europe. Northern Italy's train network is too messy and inefficient.

b720
Posts: 891
Joined: 04 May 2006, 00:00

Re: Alitalia again near bankruptcy

Post by b720 »

Little note, Italy s trains are fantastic. Light years ahead of ours
In Belgium. I've loved in both countries and used trains in both.
Alitalia cn be profitable if they ace hlf of the incompetent work force
An make the rest wok double.
Arab oil money I spent in billions around the d in casinos. Investmn
In alitalia is peanuts.

ticketbuyer
Posts: 118
Joined: 23 Sep 2008, 21:43

Re: Alitalia again near bankruptcy

Post by ticketbuyer »

In fact trains between Rome and Milan are run by two operators, one state and one private. The service has become so popular that-
http://ansa.it/web/notizie/rubriche/eng ... 16062.html
Chapeau!

User avatar
cathay belgium
Posts: 2359
Joined: 18 Aug 2008, 00:17
Location: Lommel-Belgium
Contact:

Re: Alitalia again near bankruptcy

Post by cathay belgium »

Hi,
On a note trains could be the reason, but my guess of the cancellation is that AND Alitalia ( with it's hub ) AND easyjet ( for point to point traffic ) already on the route maybe the need had been furfilled and FR won't battle it now because of the LACK of planes and because they see more profit in other routes ;)
If Easy cancels next year their Brussels Gatwick flight will we blame it on the success of the Eurostar ? ;)

CXB
New types flown 2022.. A339

User avatar
sn26567
Posts: 40827
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Alitalia again near bankruptcy

Post by sn26567 »

Etihad-Alitalia deal could strengthen Air France's plan to reinvest

Air France and KLM Royal Dutch Airlines parent Air France-KLM CEO Alexandre de Juniac says that a planned investment in Alitalia by Etihad Airways could strengthen his airline's plans to re-invest providing certain restructuring conditions are met.

In his interview with the Financial Times, Mr de Juniac said he was keeping Air France's option to invest in Alitalia "open". “Etihad brings new money and also a co-operation in the East. It is something that is changing the business case,” he said. He added that Air France would wait for the outcome of talks between the Italians and the Emiratis before playing its hand.

Despite Air France-KLM now holding only a 7% stake in Alitalia, Mr de Juniac said a cut in ties would be detrimental to both parties, but more so on the Italians' part. “I think we are an even more important partner for them [Alitalia] than they represent for us. It would be detrimental to both companies if our links were cut, but probably slightly more detrimental for Alitalia,” said Mr de Juniac.

Source: ch-aviationj
André
ex Sabena #26567

Air Key West
Posts: 1107
Joined: 23 Jun 2007, 20:51
Location: BRU

Re: Alitalia again near bankruptcy

Post by Air Key West »

Air Key West wrote:
airazurxtror wrote:I think the EU better block non-EU airlines from investing in EU airlines if those non-EU airlines are majority state owned, just as it better blocks non-EU governments from buying into EU airlines all together: not to protect certain EU carriers, but simply to make sure all EU airlines can still compete on a level playing field in future too, one which isn't distorted by government subsidies, be they coming from within the EU, or -something new to the game- from outside the EU.
The EU (= the governments of the member States) have made the EU into the most liberal trade partner in the world. Now Barroso is saying : we must re-industrialise Europe. Our governments let practically the whole European textile industry to be moved to Asia and mainly to China. Try today to find a piece of garment REALLY made in Europe is nearly impossible. (the texile industry is probably the most extreme example, I know).
The Chinese and Qatari are heavily investing in (= buying) big parts of European companies or buying real estate in Europe.
The world of aviation is changing, too, and it's too late to stop the trend. It seems like four Near&Middle-East carriers will dominate aviation worldwide in the decades to come. Qantas has realised it already and swapped its partnership with BA for Emirates.
It will, however, be interesting to see what wil happen to the Big Four, if/when Chinese airlines really "take-off" and start to massively compete with the Big Four. China still has a cheaper workforce than for instance the UAE and the next aviation battle will be between them and China (Europe has already lost the battle, at least on the Eastern front). Three or four LCCs will dominate the European market and I don't know how (even big) European airlines will keep their long haul operations profitable.
Since State aid is prohibited in the EU, perhaps it is better that "State aid" from non EU countries makes it possible to keep jobs for European workers in Europe. What an irony !
If the Chinese are allowed to invest in the port of Athens, shipyards in the north of Portugal or more recently in Peugeot in France, there is no reason why Etihad would be stopped from PERHAPS saving AZ.
(Future will tell if the deal goes through). In short : Europe is no longer the center of the world. Traditionally, Europe was pictured on the center of worldmaps. On the new ones, Europe (and America) are moved to the sides and Asia (which includes the Middle East) is taking central place. Whether we like it or not...
My apologies to airazurxtror. Because of a technical mishap, the quote I refer to erroneoulsy starts with airazuxtror's name, whereas it should have been "Inquirer". Apologies again to airazurxtror.
In favor of quality air travel.

ticketbuyer
Posts: 118
Joined: 23 Sep 2008, 21:43

Re: Alitalia again near bankruptcy

Post by ticketbuyer »

According to James Hogan, CEO of EY, there is a 50% chance of them investing in AZ and not until April.

http://english.alarabiya.net/en/busines ... -deal.html

AZ is still losing money so the longer EY waits the cheaper a share of AZ will be.

User avatar
sn26567
Posts: 40827
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Alitalia again near bankruptcy

Post by sn26567 »

Alitalia-Etihad deal to close this week, minister says

A deal between Alitalia and Etihad Airways should go through this week, Italian Transport Minister Maurizio Lupi told the Lower House on Wednesday (2 April).

In early February, Etihad and Alitalia issued a joint statement saying they were in the "final phase" of negotiations for a deal that would see the Abu Dhabi carrier buy as much as a 40% stake in its Italian counterpart, the equivalent of a much-needed capital injection of 350 million euros. But the arrangement, as well as other plans to bring Alitalia back to profitability, have been controversial.

In addition to Lufthansa's competition, the owner of British Airways has said that a plan coordinated by the Italian government to rescue Alitalia triggered the same concerns. The complaints came as Alitalia was poised to sign a 200-million-euro financing deal with banks as part of a 500-million-euro bailout package engineered by the previous Italian government last autumn. This also included a controversial 74-million euro investment by Italy's state-owned post office Poste Italiane. International Airlines Group (IAG), the holding company that owns British Airways, Iberia and Vueling called that a form of protectionism and is illegal under EU laws governing state assistance to businesses.

Rome, April 2, 2014
André
ex Sabena #26567

airazurxtror
Posts: 3769
Joined: 17 Nov 2005, 00:00

Re: Alitalia again near bankruptcy

Post by airazurxtror »

The bargain is not yet clinched.
Etihad has more demands regarding :
- new routes out of Linate
- the High Speed Train must go straight to Fiumicino
- a restriction to the LCC competition in Italy
- the license to fire 3.000 employees
- what the banks will do about the debts of Alitalia

http://economia.ilmessaggero.it/economi ... 7836.shtml
IF IT AIN'T BOEING, I'M NOT GOING.

Air Key West
Posts: 1107
Joined: 23 Jun 2007, 20:51
Location: BRU

Re: Alitalia again near bankruptcy

Post by Air Key West »

One may or may not like Etihad and other Gulf carriers, but one thing is sure : they know how to manage airlines in a successful way (thanks to a politically airline-friendly attitude). To me, at first glance, Etihad's demands are totally legitimate. They know how to run a business. Their own airline took a number of years to become profitable, but their commercial policy has begun to bear fruit. Let's hope AZ management and employees, as well as Renzi give in. It's probably their last chance to keep alive.
In favor of quality air travel.

Boeing767copilot
Posts: 1385
Joined: 13 May 2004, 00:00

Re: Alitalia again near bankruptcy

Post by Boeing767copilot »

Alitalia-Etihad talks, Italian Transport Minister: "Maybe someone is rowing against"

The negotiation between Alitalia and Etihad for the entry of the Abu Dhabi-based company in the ownership structure of the main Italian carrier has not stopped, but has just slowed down: this is the opinion of Italian Transport and Infrastructure Minister Maurizio Lupi, expressed ruing a question time at the Senate.


http://www.avionews.com/index.php?corpo ... =index.php

User avatar
sn26567
Posts: 40827
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Alitalia again near bankruptcy

Post by sn26567 »

Etihad offer to Alitalia expected by Sunday (today)
Deal includes 300-mn-euro capital injection

Sources told ANSA Friday that Abu Dhabi-based airline Etihad was expected to respond with an offer by Sunday to Alitalia over a deal that involves an investment of up to 500 million euros in the cash-starved Italian carrier. An Alitalia board meeting was expected to follow by Tuesday at the latest.

The deal, which has been in the works for months, includes a 300-million-euro capital injection from Etihad in exchange for a 40% stake.

Last week, Lupi revealed that Etihad had set further conditions on the possible investment deal, which has stumbled over the amount of debt that Alitalia has on its books - about 800 million euros - as well as the size of the Italian carrier's workforce. Further clouding the deal have been complaints from competitors that could trigger European Commission concerns about ownership and control of European airlines as well as competition issues.

The Gulf-based carrier has been drawn to Alitalia as it is vying to broaden its network in Europe. Etihad has been expanding aggressively into Europe, and Alitalia would give it a further foothold in a lucrative market.

Source: Gazzetta del Sud
André
ex Sabena #26567

User avatar
sn26567
Posts: 40827
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Alitalia again near bankruptcy

Post by sn26567 »

Alitalia looking to create bad company to woo Etihad

Italian airline Alitalia is considering creating a separate company to hive off its bad debts and appease Gulf-based suitor Etihad. The plan was discussed at a meeting in Milan on Friday (2 May) between executives of the loss-making airline and four Italian banks, including UniCredit and Intesa Sanpaolo.

Under the plan to woo Etihad, the new bad company would take on the majority of Alitalia's debt, amounting to more than 800 million euros, and around 3,000 staff. Etihad is looking to buy up to 49 percent of the Rome-based airline but does not want to absorb all of Alitalia's debt. It has also asked that Alitalia's 14,000 staff are cut by up to 3,000. However, the bad company idea may face resistance as Alitalia's creditor banks do not look favourably on the prospect of creating a separate company to hold the bad debt, since this would likely expose them to greater losses.

Source: Reuters and Business Recorder
André
ex Sabena #26567

User avatar
sn26567
Posts: 40827
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Alitalia again near bankruptcy

Post by sn26567 »

The talks between Etihad and Alitalia are still not concluded yet. But at least Italy's government, banks, Alitalia shareholders agreed yesterday (Monday 12 May) to continue the talks.

The government said it urged Alitalia management to continue the talks, adding that more meetings would take place between the two airlines in the next few days.

Earlier, Federico Ghizzoni, the CEO of Italy's top lender UniCredit, said the bank was prepared to do what it could to help Alitalia but there were limits.

Last week, talks had stalled on the restructuring of Alitalia's debt and staff level issues.
André
ex Sabena #26567

User avatar
sn26567
Posts: 40827
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Alitalia again near bankruptcy

Post by sn26567 »

Etihad plan sees Alitalia returning to profit by 2017

Loss-making Italian airline Alitalia could return to profit by 2017 under a turnaround plan presented by Etihad Airways as part of tie-up talks between the two carriers, an Italian government source said on Thursday.

Etihad’s plan sees Alitalia reaching a net profit of ₤108 million by 2017, revenues of ₤3.66 billion and earnings before interest, tax, depreciation and amortisation of 526 million euros, but its proposal is tied to demands around debt that have yet to be tackled.

Etihad would like to turn Rome’s Fiumicino airport into an intercontinental hub by adding seven long-haul routes in three years, boosting connections to European capitals from the Linate airport outside Milan and increasing the number of weekly long-haul flights from the northern Malpensa airport.

According to the proposal, Etihad, which could invest more than ₤500 million in exchange for a 49 per cent stake in the Rome-based airline, wants banks to write off up to ₤560 million of Alitalia’s debt and to extend the maturity of ₤140 million of senior debt to 2021.

One of the latest options put forward by Alitalia is the possibility of turning the carrier into a holding company which would take on the majority of the airline’s debt.

Alitalia’s business operations, including its fleet and flying slots, would then be transferred to a new firm, that would be controlled by the holding company, and in which Etihad could invest directly via a capital increase.

Full details: http://gulfnews.com/business/aviation/e ... -1.1333393
André
ex Sabena #26567

Inquirer
Posts: 2095
Joined: 14 Feb 2012, 14:30

Re: Alitalia again near bankruptcy

Post by Inquirer »

In related events, another equity investment of the Abu Dhabi based carrier, Air Berlin, is reporting a Q1 net loss of some €210m, worse than the same period last year. The loss comes after Etihad decided to inject some €300m only last year to cover the losses of 2013.
http://www.rttnews.com/2322005/air-berl ... idens.aspx
Some have endlessly deep pockets, it seems?

Post Reply