New Start: ITA Spends €90m On Alitalia’s Branding To Stop Its Use

Italy’s new state-owned flagship airline, state-owned carrier Italia Trasporto Aereo (ITA), has spent €90 million on Alitalia’s branding to stop its use. Following years of financial losses and failed rescue attempts, the one-time symbol of Italian style and glamour took to the skies yesterday with ITA’s inaugural flight.

Alitalia A320
ITA’s first flight was between Milan and Bari. Photo: Getty Images

In a last-minute deal to ensure that the 75-year-old Alitalia name lives on and to stop it from being used by anyone else, ITA agreed to pay €90 million ($105 million). The deal, which was down from the original €290 million ($336 million) asking price, now ensures Alitalia’s brand and identity live on.

ITA can use the Alitalia brand indefinitely

The deal means that ITA can indefinitely use Alitalia’s identity, Internet domain, livery, and uniforms. Despite now having bought all the rights to Alitalia’s name and identity, ITA will remain legally separate from the failed Alitalia so as not to be liable to Alitalia’s debts.

ITA began operations officially early yesterday morning when an Airbus A320 with registration number EI-DTK took to the skies. ITA flight number AZ1637 took off from Milan Linate Airport at 06:20 Friday morning for the 1hr 25-minute flight to Bari International Airport-Karol Wojtyla (BRI) in Southern Italy. The debut of the new downsized state carrier will sport the same green-white-red livery of Alitalia. However, heading into the weekend, management revealed a new livery for the future.

Alitalia has had a turbulent history

Founded in 1946, Alitalia had passed through a dizzying succession of owners and restructuring before state-appointed administrators finally took it over in 2017 to avoid being liquidated and sold off. Throughout its turbulent history, Alitalia kept being given a lifeline to survive. In the last 21 years, Alitalia only made a profit in one year. It only survived after the Italian government pumped €8 billion ($9.27 billion) into the failing airline alone in the last three years.

When speaking about Alitalia’s demise to newswire service Reuters, leader of the national-conservative party Brothers of Italy Giorgia Meloni said:

“Today, we are losing another jewel, a company that has forged the history of our nation and … made us proud to be Italian.”

The opposition party blames Italian Prime Minister Mario Draghi’s government for Alitalia’s demise.

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Nobody wanted to buy Alitalia

Initially, the government wanted to sell Alitalia to private investors, but nobody was interested, given the airline’s massive debt and oversized workforce. The new carrier ITA, in which the Italian government will invest €1.35 billion ($1.57 billion), will begin life with 52 aircraft and 2,800 employees. A significantly smaller number when compared to Alitalia’s 110 planes and 10,000 employees.

Alitalia
Alitalia was only profitable for one year in over two decades. Photo: Getty Images

Under a deal worked out with the European Commission, ITA and Alitalia must have a clear separation. ITA needs to be profitable by the end of its four-year business plan in 2025.
However, Alitalia’s mismanagement and heavy trade union influence on its workforce may be hard for ITA to shrug off.

Of the 10,000 workers who previously worked for Alitalia, 7,000 have been laid off; the Italian government will continue paying their salaries until sometime in 2022.

What do you think about ITA? Will it make a profit, or is it just the beginning of a new failed government-owned airline? Please tell us what you think in the comments.

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