Alitalia’s administrators have called time on the to-ing and fro-ing, and have invited expressions of interest for the airline by the middle of the Month. Investors are being invited to bid for the loss-making airline by midnight on March 18th.
A deadline of March 18th
Alitalia has been run by its administrators since it went into extraordinary administration in May 2017. Despite accruing a debt of $3.3bn, the airline kept flying while it awaited a buyer. Rumbles of interest from aviation investors ranging from Delta Air Lines to easyJet to an Italian railway company were heard, but as yet not one has made a firm offer for the airline.
Now, it seems the administrators are ready to call time on the messing about. Reuters has reported today that investors are invited to submit expressions of interest for the airline, with a deadline of midnight March 18th.
Prospective buyers have the option of making a play for the entire airline, or for one of its three subsidiary businesses. These are the aviation side, its handling business or its operations business.
Having a firm date to work towards is certainly progress for Alitalia, but that doesn’t necessarily mean we’ll see a buyer coming forward. As we’ve seen with other loss-making airlines such as India’s Jet Airways, if no investor makes an offer, that deadline could end up being somewhat movable.
Hobbled by coronavirus
Alitalia has been in dire straits for some time now. The loss-making airline had received support in the past from the Italian government, quite extensive support as it happens. In 2017, it had a staggering $1bn bailout from Italy, and at the start of the new year, it got a further $447m windfall from Rome.
At the time, the Italian government stated it was the last money that Alitalia would get, and warned that it could be closed down by mid-2020 if a buyer was not found. That loan is currently under investigation by the EU to see if it’s allowed under competition law.
Since then, things have not got better for the struggling Italian flag carrier. Although the demise of Air Italy will have temporarily buoyed spirits at the airline, the impact of the coronavirus will have rapidly taken the shine off that.
Although initially centered on China, COVID-19 spread quickly to Italy. The nation was by far the worst hit in Europe, and confirmed cases have ballooned over the past few days to over 3,000 today. The Centers for Disease Control and Prevention has issued a travel warning to the public encouraging them to avoid all non-essential travel to Italy. That’s got to be painful for Alitalia, and won’t be helping its efforts to find a buyer.
Overall, the demand for expressions of interest for Alitalia is a positive move. It shows that the administrators are ready to really give the airline a push to find an investor. However, you have to question whether now is the right time, and how the virus outbreak will affect Alitalia’s chances.
What do you think about Alitalia? Will it be saved in time, or will we be lamenting the loss of yet another airline this year?