Announced last week, the government of Italy is allowing a further delay for the presentation of a formal business plan for the relaunch of Alitalia. This effectively continues the uncertainty surrounding the fate of the Italian flag carrier. However, the consequences of a collapse are so negative that the government appears desperate to appease the interested investors.
Eight more weeks
According to Italian website ANSA, Minister of Industry Stefano Patuanelli said last week that he would sign an extension of a deadline of at least eight weeks. This was to be done at the request of the interested parties: Delta Air Lines, Ferrovie dello Stato (FS) and Atlantia.
The three parties have been discussing how to revive Alitalia for months, already pushing back various previous deadlines for making a firm proposal. In fact, according to Reuters, this extension comes just shortly after the passing of an October 15th deadline set by Patuanelli. This is what he had to say at the beginning of this month:
“The overall situation of the company was examined, and there was an agreement that there are the conditions for a binding proposal to be presented by the buyer consortium by October 15…In this context, we call for responsibility on all sides and speedy decisions, given that the Oct. 15 deadline cannot be prolonged,”
These words are made all the more empty now that the deadline has passed and an additional extension has been granted. Aviation Week reports that an October 23rd statement sets the new deadline for November 21st.
Depending on certain conditions
According to AirlineGeeks, as an earlier deadline was approaching, Atlantia and Ferrovie dello Stato issued press releases confirming their commitments to saving Alitalia. However, both companies made it clear that some strict conditions had to be met.
Firstly, they require the participation of a strong industrial partner which would also make a large investment in the airline. Many look to US carrier Delta Air Lines as this savior. However, this conditional statement comes after Delta offered only 100-120 million euros. This seems like a hint that the figure needs to be higher.
Secondly, the investors want an agreement on governance for the new company. Atlantia and Ferrovie dello Stato would like to be involved in the CEO selection process. This would happen with the endorsement of the Italian government. AirlineGeeks also notes that Delta Air Lines has a history of wanting a say in who takes key positions. This would be unlikely so long as Delta fails to invest a more significant amount of money.
As Alitalia reportedly employs over 11,000 workers, the stakes are high and the government will want to give potential investors any chance to make the rescue work.
Do you think these suitors will be able to put together a proper plan by November 21st? Or is this just prolonging the collapse of another airline? Let us know what you think by leaving a comment.
We’ve contacted Alitalia for comment but have yet to receive a response.