Italy Mulls Merging Some Air Italy Assets Into New Alitalia

** Update: 13/06/2020 @ 13:23 UTC – details of Air Italy employee status amended. **

Italy’s Transport Minister has put forward the suggestion that a merger between Air Italy and Alitalia could be on the cards in the future. Speaking on June 12th about the future of Italy’s aviation sector, Paola De Micheli shared that if it is willing, Alitalia might absorb some of the assets of liquidated Air Italy.

Alitalia in flight
Italy has suggested that Alitalia could take some of Air Italy’s assets. Photo: Getty Images

Alitalia could take Air Italy assets

It was back on February 11th that Air Italy met its fate by liquidation. The Sardinian airline, which only began operations in 2018, ceased flying earlier this year after its owners were unable to secure a high enough investment to save it. While there was talk of Qatar Airways upping its 49% stake to rescue the airline, ultimately, the conversation has now shifted.

According to the Italian newspaper Olbia, government ministers yesterday met with Air Italy unions and representatives of Sardinia and Lombardy to discuss the airline. During the talks, Transport and Infrastructure Minister Paola De Micheli made a statement regarding the absorption of assets from Air Italy. According to ANSA, she said that in developing the new Alitalia, stakeholders could look at a “possible integration of some Air Italy assets.”

Will Alitalia choose help from Air Italy? Photo: Getty Images

De Micheli continued to say that the decision would be up to Alitalia. It’s a possibility, but if it does not fit the new strategy, it might not be a reality. So, what are the assets?

What assets could Alitalia take?

Interestingly, there are no aircraft to discuss when it comes to Air Italy’s assets. Leased Air Italy aircraft have since been returned to their lessors. Also, Qatar Airways has reclaimed the planes that it had shared with the airline.

Instead, Air Italy has divided its wealth into two packages. The first contains valuable operational assets such as airport slots, traffic rights, and Air Operator Certificates. The other is for maintenance.

Air Italy
There are no Air Italy aircraft for Alitalia to take, but will the other packages help? Photo: Getty Images

Despite the lack of much-needed aircraft, the packages may still seem attractive to Alitalia. The idea of a merger was first floated back in April by Salvatore Deidda, a member of the Italian Chamber of Deputies. Back then, the rationale was the same as today: merging would create a more reliable Italian airline.

That line of thinking has now become particularly relevant during this challenging time for the aviation industry. If Alitalia seeks to compete again with other international airlines and do it better than before, it will need to be in an incredibly strong position. That means taking all the help it can get to take the edge off the competition.

Will it be the make or break of the new Alitalia?

These new package deals from Air Italy certainly holds some promise for the future. However, will they be enough? Some of the main criticisms of the old Alitalia were the outdated aircraft and excessive workforce. It’s already apparent that there will be no new aircraft coming from Air Italy, but what about its staff?

Empty Italian airport
How does Alitalia make sure it’s the first choice for Italian travel? Photo: Getty Images

Ministers are expected to reconvene to discuss the fate of some 1,450 Air Italy employees that may suffer due to the airline’s liquidation. Though there is hope that some of them may keep their positions within Italian aviation, it would be unwise to re-employ them all.

That said, one of Alitalia’s glaring flaws has nothing to do with its physical assets. It’s to do with the brand. If the Italian carrier is not the first choice for travelers to Italy, then Alitalia needs to do a lot to raise its profile. Additional airport slots will help, but it’s going to need to prove that it has the financial viability to survive during this difficult time.

Do you think Air Italy’s assets will benefit Alitalia? Have your say in the comments.