Alitalia's financial difficulties
The reasons of Alitalia's difficulties are well known, but nobody in Italy seems to tackle with the problem (and that is why foreign investors are so reluctant in investing in the Company):
- 3 hubs, where only one is needed. But politicians do not want to see Rome just being a destination rather than a hub
- Some domestic lines are not profitable, but MPs do not want to see these lines closed, in the name of Public service and prestige (but they do not want to pay for this service)
- Only a few long haul flights are profitable: Alitalia needs to stay focused on Mediterranean flights, where the demand is high and the competition rather limited. Alitalia dreams to be AF, but should be profitable only by being a good regional company, as CSA or Austrian Airlines are.
- Poor skills in yield management, so that occupancy rate is much lower than AF. Today, Alitalia is not a winner in the Skyteam alliance (the market shares of Alitalia’s allied companies – and competitors – are generally much better in code share flights)
- Poor productivity and numerous people for ground operations, well known for their inefficiency and total disorganisation. Trade unions are still very powerful at Alitalia, which is a difficulty to help the company to move forward
- Very low quality of service on board and for ground operations (but this is not the number one problem, even if, as a customer, anyone can see this issue: Alitalia will not gain market shares and be profitable only by improving the quality of service)