According to Reueters, "Alitalia has about 1.37 billion euros of debt and is bleeding well over 1 million euros a day. Cash resources are around 160 million euros, Corriere della Sera newspaper said on Tuesday. But rising oil prices could shrink those finances further."
So give or take 160 days it would seem, they should be able to last through the peak summer travel season.
Could Alitalia go the way of Aloha and ATA? Think the airline and market is too big to be neglected. Either Italian government or EU would probably get more involved in a bail out if it got to that point.
idealflyer, that is not how things work. The entities which are owed the 1.37 billion euros will not stand by and allow the last bit of cash to get spent. If the airline is going to have to die anyway, it will die with some assets that will be split up among the creditors.
Also, you perhaps are NOT aware that the EU has expressly forbidden any government bailouts here. And what is the point of flying the peak summer season, as you put it, if that still means losing a million euros a day?
For those holding tickets on AZ and purchased with a credit card, if AZ does go bankrupt, you can dispute the charge with your credit card company and they should refund you the money. The credit card company can give you back your money because most businesses that accept credit cards have a reserve or escrow account with the credit card company. The trick is going to be finding an alternate flight especially in the summer with the weakening dollar.
Alitalia Unions Willing To Give Up On Fintecna Role
Alitalia Unions Willing To Give Up On Fintecna Role -Sources
Wednesday April 9th, 2008 / 19h34
ROME (MF-Dow Jones)--Labor unions at Alitalia SpA (AZA.MI) are willing to drop their demands for Italian state holding company Fintecna SpA to have a role in the struggling airline, in an effort to soften their stance against Air France-KLM SA's (AFLYY) bid, people familiar with the matter said Wednesday.
Alitalia's unions are scheduled to meet the Italian government Thursday to discuss their proposal, which now scraps Fintecna's role, said union sources, who asked not to be named. They are also open to discuss the timing for the layoffs Air France-KLM requires.
The union's requests remain as far as not shutting down Alitalia's cargo operations before 2010 and bringing forward investments on the carrier's large-range fleet.
Last week, Air France-KLM SA quit talks with Alitalia's unions, rejecting their demands.
Alitalia's unions asked the Franco-Dutch carrier to buy all of the Italian airline - including the loss-making ground-services business, or AZ Servizi, that wasn't fully included in the Air France offer.
Unions also said Fintecna, which has a stake in Alitalia's ground-services business, should take part in a capital increase that Air France had planned for the unprofitable Italian carrier.
So the unions are still at it.... why would AF agree to buy and continue to operate "the loss-making" ground service operation? The unions have got to understand that there is really no negotiating here.
So the unions are still at it.... why would AF agree to buy and continue to operate "the loss-making" ground service operation? The unions have got to understand that there is really no negotiating here.
Well, I have no actual labor experience, let alone labor experience in the airline industry - - but couldn't this be the same kind of hand-to-the-fire labor negotiating that has occurred in other airlines in desperate straits?
<< why would AF agree to buy and continue to operate "the loss-making" ground service operation? >>
ummm... because they would get some other concession in exchange? It seems like it's all about "solidarity" - - whether one (or more) "brotherhood" of workers is willing to concede something to save something (like their entire livelihoods?) for another "kindred group" of fellow workers.
Isn't that how these seemingly borderline-suicidal negotiations go?
Well, the bottom line is, noone (aside from top mngmt and financial guys at Alitalia) knows how much cash Alitalia has. €170m of liquidity actually refers to "cash and short-term credit", so not entirely real cash.
Some of us do remember how Swiss Air ceased operation--when UBS declined to extend the financing. And noone thought the flagship swiss bank such as UBS would do that to a flag carrier...
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MILAN, Apr. 11, 2008 (Thomson Financial delivered by Newstex) -- Alitalia SpA's new chairman Aristide Police wants to put the Italian flagship carrier into administration using the special law, 'Legge Marzano', which was used to save Parmalat SpA (OOTC:PLAJF) (OOTC:PLATF) , the daily Finanza e Mercati said, without citing sources.
According to F&M, Police has told colleagues the company has cash for only one month's operations. (Emphasis added.)
Police said if a solution to the crisis is not found immediately after the general elections scheduled this weekend he will start proceedings to put the group into special administration using the Marzano law.
On Thursday Italy's prime ministerial undersecretary Enrico Letta said the government is counting on an agreement next week with Air France-KLM (NYSE:AKH WS) (OOTC:AFLYY) on tying up with Alitalia.
Silvio Berlusconi, head of the centre-right coalition which is in pole position to win this weekend's general elections, has said he will not accept an agreement with Air France.
Copyright Thomson Financial News Limited 2008. All rights reserved.
I have a problem on my hand in the sense that I have a trip due to start on AUG with an ARC ticket issued by AZ (i.e. AZ document) with flights being operated by SQ, QF, BA and a few other airlines.
So if AZ goes belly up, do these other airlines refuse to honour the ticket?
Refunding the ticket and claiming my money back is a very undesirable solution, since a similar ticket purchased again will cost me 12x the price of the AZ ticket.
I have a problem on my hand in the sense that I have a trip due to start on AUG with an ARC ticket issued by AZ (i.e. AZ document) with flights being operated by SQ, QF, BA and a few other airlines.
So if AZ goes belly up, do these other airlines refuse to honour the ticket?
Refunding the ticket and claiming my money back is a very undesirable solution, since a similar ticket purchased again will cost me 12x the price of the AZ ticket.
If AZ goes belly up then very likely you will be out of luck. Some credit cards provide protection, some travel insurance also does.
But if it goes like it went at Swissair none of the other airlines will accept this ticket.
BTW - is your ticket starting in BKK?
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Quote:
Originally Posted by FedUp2
So if AZ goes belly up, do these other airlines refuse to honour the ticket?
As others have commented in other threads, your contract is with the issuing airline. If (when) AZ dies, your contract dies with it.
I was supposed to fly AZ end of this month. I've already changed my airline to AC as I would rather not have to deal with the hassel of getting there and being "stranded".
As others have commented in other threads, your contract is with the issuing airline. If (when) AZ dies, your contract dies with it.
Yes, I agree that this seems to make most sense. However, I wonder whether there are any finer points in IATA / BSP / ARC rules that govern the use of tickets issued by a bankrupt carrier. I ask since I am positive that when AN died, tickets issued by them were still honoured by SQ, LH, TG etc.
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Quote:
Originally Posted by FedUp2
Yes, I agree that this seems to make most sense. However, I wonder whether there are any finer points in IATA / BSP / ARC rules that govern the use of tickets issued by a bankrupt carrier. I ask since I am positive that when AN died, tickets issued by them were still honoured by SQ, LH, TG etc.
That's probably at the discretion of the airlines. I believe that when a carrier issues a ticket for use on another carrier, the one doing the carrying only gets paid by the issuer once the carriage is actually done. So if the issuer goes under before carriage, then the carrier doesn't get paid.
If the carrier actually executes carriage, then at that point the carrier is effectively an unsecured lender to the now defunct issuing entity. I don't know if there's an IATA rule that grants partial payment from whatever assets are now left from the defunct issuer or if it's something the bankruptcy lawyers handle in due course.
I guess one way to find out is to take your chances and see what happens.
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So through Delta, I booked the first part of my honeymoon on AZ (BCN-FCO-ATH)...if/when AZ ceases ops, I imagine DL will reaccommodate us (AF/KL,etc)...of course this is probably not the forum to ask that.
