Alitalia is on the verge of bankruptcy and is desperately in search of investors. But according to a report on Monday by Air Transport World, Italian Deputy Prime Minister Luigi Di Maio has publicly stated that private investors have been making offers in order to rescue Alitalia. This comes days after Rome officially denied that infrastructure group, Toto Holding, was a potential new investor for the beleaguered airline. With regards to private investors, Di Maio stated:

"Whatever the industrial plan, it will need to be discussed and approved by representatives of those who work for Alitalia...Our aim is a real relaunch, not just a rescue."

An unappealing prospect

Despite a 1.4% increase in passenger revenue in the first quarter of 2019, it’s been a roller-coaster ride for Alitalia in recent years. The airline declared bankruptcy in 2008 and, despite significant investment from Middle East carrier Etihad, again suffered bankruptcy in 2017.

The Italian airline and flag carrier has not been able to reach profitability for many years now, and is desperately looking for investors. In the last few months we saw low cost carrier easyJet withdraw their interest, while Etihad sold back their stake in the carrier's frequent flyer program.

The current situation

In reports from Brinkwire and Investing.com we know that Ferrovie Dello Stato, the Italian State Railway is prepared to take a 30% stake in Alitalia. Delta Airlines would also take a 10-15% share and the Italian Treasury would invest in 15%. This joint-effort is worth roughly one billion euros. However, a shortfall of around 400 million euros still exists.

We still have no additional news or updates on rumors surrounding China Eastern’s interest in the company. However, several articles have written about the possibility of Italian transport group Atlantia joining the rescue bid.

The Benetton family controls Atlantia and must find a way back into the good graces of the Italian Government. This is because Atlantia is at risk of losing a motorway contract with the government after it was blamed for the deaths of 43 people in a horrifying bridge collapse last year. Atlantia has publicly downplayed at the suggestion but a source familiar with the issue said:

“Atlantia’s door is not closed ... it is now up to the government to take the lead in the talks.”

As Atlantia is the company that also operates Alitalia’s main airport hub in Rome (FCO) via a subsidiary, it would have much to gain in keeping the airline afloat.

And finally, Lufthansa is waiting in the wings to take control of Alitalia. However this is a last-resort option as the German group have made it clear that job cuts would be necessary. Furthermore, Lufthansa will not want any influence or supervision from the Italian government.

Another collapse waiting to happen?

According to CAPA, the Italian Deputy PM has stated that there will not be an extension to the April 30th deadline for bids. We’re not sure what will happen to Alitalia if the deadline passes without a viable solution.

A member of the Skyteam alliance, Alitalia employs more than 11,000 people, and flies to 74 destinations via 3,300 weekly flights. However, the airline struggles to compete with low-cost airlines and the numerous other legacy carriers crowding European airspace. If Alitalia falls, it will be the third airline to leave the market within the span of a month. Just recently the world witnessed the collapse of Jet Airways and in March WOW Air shut down as well.

What do you think will solve Alitalia’s bleak situation? Are there any companies or airlines that you would imagine as a suitable investor? And what do you think needs to change about the airline that would attract more passengers and business?