You know....about maybe 10-15 years ago, when AF was the 'old' AF that was bleeeding money, France also lent money to it against EU's advice... and now, look at Air France!
10 to 15 years ago, the EU rules were either non-existent or ultra-lax in this area. So all types of government subsidies were going out the door. The reason for the EU rule is so that you have an equal playing field - which doesn't fit a situation where one participant having a blank cheque courtesy of a government.
Also, AF took some very needed steps to become profitable, took over KLM, build up the SkyTeam alliance (which I'd characterize as AF/KL and everyone else), and has reduced (I'd like to say eliminated, but this is France we are talking about) government interference. Basically, think of what AZ has done and go the other way
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A group of 2,300 AZ employees signed an open letter, sent yesterday and addressed to the unions, the Italian government, Spinetta, and the Italian people. They refered to themselves as a group that, until now, hadn't been able to speak for themselves.
They stated that letting the AF/KL accord slip away was "an irresponsible act of pure political convenience". They wrote that the AZ management had tried with great seriousness to sustain the fusion with the Franco/Dutch company, something which was the "only solid and credible financial solution". They say they no longer feel that they are represented by the Unions.
This might be operating rather than cash losses. If AZ was losing EUR 1mm in cash per day, it would have gone bankrupt years ago (think about how much would be needed to prop it up).
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Quote:
Originally Posted by Lottie23
I don't think you guys are understanding my point....the point is this is about money. If you had a billions of dollars in a stock. Saw that this stock was about to go Bankrupt because it was running out of CASH. Wouldn't you give it another $300M Euro, ESPECIALLY, MIND YOU A BIG ESPECIALLY, when you knew you had some powerful "friends"/investors that your already in talks with that you knew would come in and buyout the company (as berlosconi does). Of course, you would...because in the end, $300M Euro is really peanuts at this point.....
Yes, but the gov't doesn't have "billions of dollars" in Alitalia stock. The company is really worth very little indeed. $1.2bn of debt, little in the way of cash, and losing $400m (?) per year. Ignoring goodwill (which is admittedly important) it's hard to see why it's worth anything more than a notional amount.
Which is the better option:
(a) Pay 300m to keep it afloat, but in the absence of an in-depth restructuring due to political and union argument, see it back to where it is now in a couple of years, or
(b) Let it go bankrupt, write off your shareholding but also write off your debt, then pick up some pieces for 300m and build something smaller but profitable from there.
That's what happened to Swissair and it seemed to work.
Incidentally, if it does go bankrupt, what happens to the slots? Are they put up for sale to the highest bidder?
You shouldn't think in market terms...Italian public debt is 1.621 billion euros...or better the 103% of our PIL....which means that 300 million euros more or less...it's just peanuts!
nobody in the govt. think they'll ever get back those money...and nobody cares about it...at least untill the upcoming elections for the Major of Rome later next week...it's funny that this is the only issue that Berlusconi and opposition agreed about in the last 15 years (a part from increasing salaries to deputies)...they both want to take the votes of roman people for giving some more money to alitalia...
if it wouldn't be for my alitalia miles i just would hope that it would get bankrupt and then sold to some foreign company...Italians will never manage to make a profit out of it! politics it's too deep inside of it...
Do you mean what we call 1.62 _trillion_ euros? - - in the US, a billion is one thousand millions (109), but I think in most of Europe it's one million millions (1012) - - all the difference in the world!
300 million is not trivial vis-a-vis 1.62 _thousand million - - in fact it is 20%!
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Quote:
Originally Posted by rexb
Do you mean what we call 1.62 _trillion_ euros? - - in the US, a billion is one thousand millions (109), but I think in most of Europe it's one million millions (1012) - - all the difference in the world!
300 million is not trivial vis-a-vis 1.62 _thousand million - - in fact it is 20%!
Thanks,
Rex, in Indiana (USA)
No, he means US billions, as most of us in Europe now use billion in the same way as in the US, at least for financial issues. 1.627 billion is 1,627,000,000. So yes, 300 million is almost 20% of that.
Anyone want to make a prediction on how long AZ is going to last? We have a family event in August and it wouldn't be too good if they went bankrupt. Thanks.
No, he means US billions, as most of us in Europe now use billion in the same way as in the US, at least for financial issues. 1.627 billion is 1,627,000,000. So yes, 300 million is almost 20% of that.
Sorry but you are totally wrong! Italy's GDP is ~1.888 trillion USD which is 1888 billion USD! The national debt is something around 108% of the GDP so 300 million or 0.3 billion is less than 0,02% and that's indeed peanuts!
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Quote:
Originally Posted by totti
Sorry but you are totally wrong! Italy's GDP is ~1.888 trillion USD which is 1888 billion USD! The national debt is something around 108% of the GDP so 300 million or 0.3 billion is less than 0,02% and that's indeed peanuts!
Whoops - sorry - I misread the post and thought he meant Alitalia's debt, not the whole country's. Yes, of course Italy's debt is a very large number.
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Quote:
Originally Posted by Gargoyle
A group of 2,300 AZ employees signed an open letter, sent yesterday and addressed to the unions, the Italian government, Spinetta, and the Italian people. They refered to themselves as a group that, until now, hadn't been able to speak for themselves.
They stated that letting the AF/KL accord slip away was "an irresponsible act of pure political convenience". They wrote that the AZ management had tried with great seriousness to sustain the fusion with the Franco/Dutch company, something which was the "only solid and credible financial solution". They say they no longer feel that they are represented by the Unions.
What happens to your FF miles? Do they get wiped away too if the company goes bankrupt? What if then it's bought by someone else do they take on the debt of the FF miles?
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Quote:
Originally Posted by lallyr
What happens to your FF miles? Do they get wiped away too if the company goes bankrupt? What if then it's bought by someone else do they take on the debt of the FF miles?
Most likely the FF miles will simply vanish. The purchaser is not necessarily under obligation to honour them.
What happens to your FF miles? Do they get wiped away too if the company goes bankrupt? What if then it's bought by someone else do they take on the debt of the FF miles?
Assuming that Millemiglia is part of Alitalia itself rather than a legally independent entity, there are basically three scenarios:
1) if AZ is sold as a going concern, the new owner will inherit all the assets and liabilities of the airline, including those of the FFP. For FFP members, nothing would therefore change, at least in the immediate future.
2) A new entity could buy some of AZ's assets (planes, route rights, etc...) and launch a new airline replacing the old Alitalia but juridically independent from it. In this case, the new airline would not inherit any of the liabilities of the old AZ (except those that it would voluntarily take on) and would not be bound to honour FFP liabilities. AFAIK, this is more or less the Swissair scenario.
3) AZ is placed under a special legal regime on the restructuring of undertakings. Many legal systems have legislation to allow companies facing economic difficulties to be placed under a special regime, usually under judicial supervision, to allow the company to restructure. The special regime usually allows the judge to force creditors to accept debts resettlements/cancellations. A well-known example of that is "Chapter 11" in the US, but there are equivalents elsewhere. I am not an Italian lawyer, so do not know what the situation is in Italy, but I would be surprised if there wasn't some kind of law on restructuring of companies in economic difficulties. What happens to the FFP in this situation depends on what powers are granted by the law to the judge or administrator and how those powers are exercised.
In any event, even under option 2) or 3), a reborn AZ would want to have people flying on its planes. It would not be very clever, in such a situation, to majorly p..s off your potential frequent flyers by wiping off the miles they have acquired in the old FFP. I would therefore expect the FFP to be kept alive, or at least some offer to be made to keep the miles alive (eg: fly X times with us and we will keep your old miles alive) as doing otherwise would be not far to tantamount to commercial suicide imo.
The real danger for existing MM miles, imo, is if AZ goes under completely without any new airline to replace it.
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Quote:
Originally Posted by lallyr
What happens to your FF miles? Do they get wiped away too if the company goes bankrupt? What if then it's bought by someone else do they take on the debt of the FF miles?
Crystal ball at the ready - frankly your guess - for that is what it is - is as good as anyones.
In a country which is unable to sort out the rubbish collection in Naples what hope is there for Alitalia? I honestly think that they will allow AZ to collapse and pick up the bits for a song and plough on. I honestly would put no money them unless it was for immediate travel as the difference between the government of France is that it has funds - Italy does not.
My own reaction would be to contact your credit card company and see if it will protect you in the event of the airline ceasing operations.
9), but I think in most of Europe it's one million millions (10
