Status: 10/15/2021 4:18 a.m.
After a quarter of a century, Italy is winding up its airline Alitalia. The new state airline ITA should end the permanent losses – with a smaller fleet, fewer staff and lower wages.
All things new? Not really. Much of Italy’s new airline ITA looks as if someone had brushed it over quickly just before take-off. The ITA aircraft? All previous Alitalia machines. The employees? Mostly taken over by Alitalia. The flight attendants’ uniforms? Comes from Alitalia. Even the flight numbers of the ITA with the abbreviation AZ are those of Alitalia.
Nevertheless, another chapter officially begins now. After years of financial infirmity, Alitalia is wound up in bankruptcy and ceases to operate 75 years after it was founded. In more than a quarter of that time – continuously since 2002 – Alitalia has flown in losses year after year. In the three pre-Corona years from 2017 to 2019 alone, Alitalia burned 1.3 billion euros in tax money. Every Italian government did financial pull-ups to keep the airline going.
“Expensive but a family member”
The new Prime Minister Mario Draghi has now put an end to it, albeit wistfully. “Someone my age has flown the Alitalia so often, almost always, that I saw it as a kind of family member,” the 74-year-old recalled the airline a few months ago. “A little expensive, but a family member.”
At the same time as the end of Alitalia, Rome has to found a new airline. The ITA is initially 100 percent in the hands of the Italian Ministry of Finance. Since it is formally a new company, Italy’s new state aviator takes off debt free. And receives 1.35 billion euros from the government as start-up funding.
Alitalia machines at Rome Fiumicino Airport: for decades the company was a national symbol. But in the end she only flew in losses.
Image: picture alliance / Photoshot
The competition, namely Ryanair boss O’Leary, is foaming. But Brussels has given the go-ahead for the ITA to start. Arianna Podesta, spokeswoman for Competition Commissioner Margrethe Vestager, defends the Commission’s decision. “I totally disagree that the decision made should be inconsistent with competition rules,” says Vestager. “The Italian side has presented the Commission with a plan that brings together various elements that have enabled the Commission to identify an economic discontinuity.”
Only a quarter of the workforce is there
Which means: Brussels approves that the transition from Alitalia to ITA is not a shell game, but the start of a new company. The billion-euro start-up financing, it is said, is “in line with the market”. One of the conditions set by the EU Commission was that ITA should not automatically adopt the brand name Alitalia. It is currently on the market, but has not yet found a prospect for 290 million euros. ITA is also not allowed to have the Millemiglia loyalty program – and with it Alitalia’s customer list -. Most of the handling had to be handed in as well.
But above all, ITA is, at least at the start, a radically smaller airline than Alitalia. Instead of the previous 10,500 employees, the new airline is initially only planning with around a quarter, with 2,800 employees. The unions have protested against this several times in the past few weeks. “It’s called the plan of a new beginning,” says Antonio Amoroso, head of the grassroots union CUB Trasporti. “But the truth is, it’s a serious downsizing plan.”
The new boss is a turnaround specialist
The ITA crew should also earn significantly less than the previous Alitalia employees. Pilots only receive around 50 percent of their current salary, flight attendants around 65 percent.
The ITA fleet is also significantly smaller than that of Alitalia. Instead of 120 planes, the new airline will start at 52, but wants to grow in the foreseeable future. An order for 28 planes has already been announced at Airbus. The ITA wants to increase its fleet to a total of 105 aircraft by 2025. Most of the machines are of the latest generation, use less kerosene and are quieter – and come exclusively from the European manufacturer Airbus in order to reduce costs for training and maintenance.
The pure Airbus fleet is a piece of the mosaic in the concept of ITA CEO Alfredo Altavilla. The 58-year-old manager has experience in resurrecting dead companies. Altavilla was at the side of Sergio Marchionne when he managed the turnaround at the Italian car maker Fiat after a few years.