dh01

The Alitalia unions voted down by a large majority the planned recapitalisation of the airline, which called for job losses and reductions in salary. The government is now holding a meeting, looks like possible bankruptcy on the horizon.

WorldLux

I doubt that the government will make Alitalia a national airline again. Too many rules object to that. Probably best at some point to go bust and have someone else start from the ground up.

AlicorporateUK

Indeed - and Italy's Prime Minister made it very clear that they wouldn't step in. The vote, as I've already stated in a different thread, was clearly a tactic from those buffoons representing workers in order to put pressure on the government and, eventually, to play the victim's role. ~10 years ago AF was willing to take over together with all debts, this time, I'm afraid, alternatives are virtually non existent.

G

Scrooge McDuck

Unless some miracle occurs, it looks like AZ will be another airline of the past in the near future - I don't believe that a miracle will occur this time, as all stake holders who could provide one made it very clear that this will not happen. What a mis-judgment from the employees.

Does anyone know how long can AZ finance their costs before running out of cash and going into default? What is their burn-rate (I have heard 500.000€ for every single day)?

AlicorporateUK

The ops board meeting scheduled for later today will most likely agree on the controlled administration and formally put the request forward to the government, who will appoint a special commissioner (there are already a few names out there). At that stage, operations will be heavily reduced (these could be as soon as tomorrow or later this very week) and chances are also that lessors will impose ad-hoc measures (indeed, grounding) of part or even all of their aircraft, which could have serious consequences and will most likely cause chaos (stranded passengers etc.). The special commissioner will focus on selling assets (whatever left, starting off with slots and the likes) and, unless anyone comes forward with an offer, the business will be channelled through liquidation. We shall wait and see what's going to happen in the ops board today but, again, there's no AF nor Berlusconi this time and things are looking rather gloomy.

G

WorldLux

And EY is long beyond the point of throwing more money at it. I'm pretty sure, they are pretty fed up with their investment choices in Europe.

MSPeconomist

Are AZ aircraft generally loaned or leased?

I know gargoyle and some other SkyTeam travelers will be sad to see the AZ option essentially disappear. Me, not so much.

AirCub1

I'm an Alitalia frequent flyer, taking over 60 flights a year with the airline both domestic and international, and holding Freccia Alata status. I also hold a dozen or so reservations for the future with AZ including a couple of business class reward tickets for the USA this summer. Clearly the future is very unclear for Alitalia today, but it is always worth bearing in mind that however Alitalia has managed its internal economic affairs, its disappearance would not only affect the direct employees of the airline, but also the thousands and thousands of jobs which rely upon the airline particularly at FCO and LIN. Times are still relatively tough economically in Italy, and the government will no doubt be very aware of the wider impact of letting the national carrier completely full. I think we may see a radical reduction in services over the next few weeks but I don't see it's completely disappearing. The political stakes could be considered way too high to allow that to happen. I am confident a solution will be found one way or another.

Dieuwer

Will the EU fine Italy and the ECB pull the plug if Italy does go ahead with bailing out Alitalia?

AlicorporateUK

This time around, a potential bailout would have calamitous consequences for the current temporary (and weak) government and not only on legal grounds (EU), but mostly bearing in mind the forthcoming elections and the public opinion which is substantially and perhaps like never before against any state intervention, which would be seen as yet another waste of public money to keep a chronic money-losing business alive for 3/4 months and before the unions decide to strike again

G

AlicorporateUK

Leased - and that would be the first handwritten item on the special commissioner's agenda (it is highly unlikely that lessors will make any sort of concession in terms of payments and the likes).

G

AirCub1

Latest news just out:

http://www.ansa.it/sito/notizie/econ...5c49b552e.html

AirCub1

All those who don't speak Italian, a quick google translate of the article:

Alitalia's Board of Directors "given the impossibility of proceeding to recapitalization" has "decided to initiate the procedures provided for by law and convened a shareholders' meeting on April 27 in order to deliberate on them." After workers called on to express themselves with the referendum, they said NO to the rescue agreement, thus opening the way for the company's commission, the board of directors still points out that "the program and operation of Alitalia flights Will not be subject to change at this time. "

The "no" to the pre-agreement for the rescue of Alitalia has clearly won, with 6.816 votes, against 3.206 yes, that is 67%.

Yesterday, at Palazzo Chigi, Prime Minister Paolo Gentiloni met Infrastructure Ministers, Graziano Delrio and Economic Development, Carlo Calenda, who in the night expressed their "regret and distaste for the outcome of the referendum". One result, they commented in a joint note signed by Labor Minister Giuliano Poletti, "which puts at risk the company's recapitalization plan." "At this point, the government's goal, as it is to understand what Alitalia's current members will decide, will be to minimize the costs for Italian citizens and travelers."

No win opens a complex scenario. The next plenary meeting convened for Thursday should deliberate on a special extraordinary administration request. Probably the joint release of the members to actually hand over the company's keys to the government.

Formalized the request, the Ministry of Economic Development would proceed with the appointment of one or more commissioners (up to 3). Without buyers or new lenders to the commissioner, he would not lastly ask for the bankruptcy of the company, with the consequent declaration of insolvency by the Court of First Instance. The bankruptcy trustee would begin the liquidation procedure, with 2 years of integration, Naspi and therefore unemployment for workers, at the same time the cessation of the company's assets 'sting'.

jbeans

If they go belly up, would they still be obligated to rebook existing reservations with a partner? Or refund money/points? Or nothing at all?

jmj10

Been following this very closely, as my husband and I are flying from BOS-FCO and back May 5th and May 14th. Really coming down to the wire for a decision.I know that our CC company will reimburse for the flight, but am also curious about rebooking on a partner airline (such as AirFrance or Delta).