Union Leaders Propose Nationalizing Struggling Alitalia

As efforts to save struggling Alitalia continue, talks of nationalization by minister Stefano Patuanelli have caught the attention of Italian transport unions. Any nationalization plan would likely involve significant structural changes at the airline.

An Alitalia Airbus A330
Attempts to find a buyer have so far failed. Photo: Eric Salard via Flickr

Reports by Flight Global today claim that Italy’s recently-appointed Minister of Economic Development, Stefano Patuanelli, has suggested nationalization could be on the cards as a potential solution to Alitalia’s current predicament.

Patuanelli’s comments have drawn a response from leaders of the Italian Transport Workers Union (FILT-CGIL). The union has asked for clarification about how a potential nationalization would be implemented.

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Fabrizio Cuscito, leader of FILT-CGIL, has welcomed a potential nationalization, noting government involvement in national carriers in many other countries across Europe. However, Cuscito also noted the government’s poor track record of positive action towards the Alitalia bankruptcy. “There are almost three years of unfulfilled promises,” he said.

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What has been going on at Alitalia?

Discussions about the future of Alitalia have been ongoing for a couple of years now. Since the airline was declared bankrupt in April 2017, negotiations to find a new buyer have proven unsuccessful.

Many different buyers have been linked with the airline, including the owner of Roman football team Lazio.

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An Alitalia A319
Nationalization is now a distinct possibility. Photo: Tobias Nordhausen via Flickr

So far, it seems that Delta Air Lines and Lufthansa have come closest to securing a deal for significant financial investment in Alitalia. At the beginning of the month, it seemed that Delta Air Lines was on the verge of securing a takeover deal which would see it acquire the 24% of Alitalia currently owned by Etihad.

But interest from German giant Lufthansa appeared to scare off Delta. Lufthansa was reportedly ready to invest €200 million in the Italian carrier, but that deal also appears to have amounted to nothing.

Nationalization – a final resort?

After investment deals from a number of private parties have failed repeatedly, talks of nationalization have now surfaced. But the prospect of nationalizing Alitalia is by no means new. Back when the airline first declared bankruptcy, the idea of nationalization was ruled out.

This stance has been repeated numerous times since. Back in February, former Economy Minister, Giovanni Tria, reiterated that nationalization was not an option and that a market solution was the best way forward.

An Alitalia Airbus A320
Alitalia declared bankruptcy back in 2017. Photo: Eric Salard via Flickr

However, with the formation of a new Italian government, and the numerous failed attempts to find an investor, it appears nationalization is now being seriously considered. As shown by the widespread objections to nationalization, there are clearly many parties that view it as a less than ideal resolution to the Alitalia situation.

Italian workers unions have objected to any solution which would result in mass lay-offs, which complicates the situation significantly. Maintaining the current staff and operational structures would be difficult if nationalization was pushed through.

Following the comments from FILT-CGIL’s Fabrizio Cuscito, it will now be down to the recently-appointed Minister of Economic Development to propose a nationalization plan which the unions agree with.

However, the previous objections towards nationalization from numerous other bodies and individuals suggest it will not be easy to come up with a plan that garners widespread support.

Alitalia has not been available to respond to Simple Flying’s request for comment on the matter.

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TonytTDK

Alitalia is (& has been for some time) little more than a ‘vanity-project’ for the italian taxpayers.? The taxpayers seem to be generally happy to fund the Airline.? It’s financial underperformance, its lack of inspirational & aspirational thinking, it’s total failure to address the outdated to the point of archaic, working practices, don’t seem to have turned the Italian people against it’s ‘National’ airline. But no-one in their right mind would put any ‘outside’ investment money, into the big deep hole that is Alitalia’s accounts.! Lufthansa & Delta are the current 2 who are interested, but can’t see a way… Read more »