Italian Government Approves Another Delay To Alitalia Relaunch

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.

Alitalia jet on taxiway
Over 200 Alitalia flights were canceled due to a recent strike. Photo: Alitalia

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:

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“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,”

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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.

Alitalia
Alitalia has not been profitable for quite some time. Photo: Alitalia

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.

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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.

Alitalia 777 Tail
An Alitalia 777 sits in a hangar undergoing maintenance. Photo: Alitalia

Conclusion

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.

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Jim P

I doubt that an agreement that is agreeable to Delta can be reached. As noted based on previous history, Delta will want a say in the makeup of the executive group. Alitalia’ s history has been to get another infusion of cash from the Italian government then for the government to step aside and let Alitalia do whatever (which did not require acceptance of responsibility by the air crews and other employees for any part of the most recent failure.) The worst international flight I ever took was FCO-EWR on Alitalia at the end of a Mediterranean cruise. (flight booked… Read more »

Roger Stewart

On and on it goes. Italian governments shoving their hands into taxpayers’ pockets to force-feed a zombie. Alitalia will never fly on its own wings until it is completely wound down all workers laid off, the brand sold and bought by fully new, fully private investors. It is a matter of corporate culture from management to employees. The management doesn’t know how to run an airline. The company is ballasted by unfavourable, politically-piloted contracts. The employees have expectations that are untenable in this day and age. It just can’t work unless all the above is changed. Subsidies just go so… Read more »