AirCub1

Interesting article


http://www.cnbc.com/2017/04/29/bailo...yses-rome.html

rje444

Matteo Renzi is now being projected as likely to win the election today in Italy. And Renzi has been saying recently that Alitalia can and must be saved.

The widespread postings of Alitalia's obituary by the press just might turn out to be premature. So the next month could be interesting for those of us who want to see Alitalia survive.

brunos

If Renzi was silly enough to organize a constitutional referendum, he could be silly enough to "save" AZ. But a lot can happen till the May 2018 general elections.

dan88

if the elections are in may 2018, and they clearly would not last that long, can somebody explain how him winning would really change anything?

AlicorporateUK

True to some extent. Admittedly, I tend to read (when bothered) financial newspapers only, whereas I have literally abandoned mainstream media and press since the wars in the former Yugoslavia i.e. quite a few years ago

G

AlicorporateUK

He would use the [AZ] saga for political gains, I suspect he would adopt a similar modus-operandi which featured amongst the main highlights in Berlusconi's manifesto back in 2008. On this particular occasion, though, he may have not realised that the limited time for action will almost certainly prove to be mission-impossible material for his own (and anybody's) abilities.

G

rje444

He has said that he would introduce a plan to save Alitalia by May 15th. I do have to wonder what sort of a government bailout he could introduce in such a short time. But maybe he knows he won't really have a workable plan and is just being political. But that brings up the question of whether advocating for saving Alitalia is even a winning position in Italy right now. Polling (if we can believe them) is showing the public in Italy opposing a government bailout of Alitalia by 70%.

Xandrios

It is most likely much more than 500K per day. If it was only 500K then a 400m loan would last them three years.

I can imagine that if this loan is indeed going to happen the money would be used to keep operations running while the airline becomes even less profitable over the next months. People may cancel flights, and probably far fewer new bookings will be coming in - until either the airline is restructured, sold (and then restructured), or collapses.

If restructuring is even an option. The employees voted down the restructuring plan before, so there may not be another - and even if there is, it is not guaranteed that it will be accepted then.

WorldLux

I suspect that those estimating loses at 500k/day used the figure of aids that Italy has granted over the years. Over 40 years and up until 2014, Italy spend just over 7B € on their baby. That's 180M €/Year or 500K €/day.

On average it's probably much more. I read some "experts" estimating losses at 2M €/day. That would roughly fit: A 400M € loan would last for about 6 months if they manage to keep loses at 2M €/day. IMO they won't be able to hold that level of loss. If ticket sales tank, they'll be looking at more loses.

I think that's where the Italian government went wrong. If Italy decides to save Alitalia, they'll get hammered by the European commission for circumventing competition law and possibly violating state aid law.

IMO they should have set up a fund with the money to rebook any passenger that is stranded as a result of the bankruptcy of a carrier with an Italian AOC. That way, those already booked on AZ wouldn't have to fear insolvency.

By financing AZ directly now, they are just going to keep AZ alive for another month (given that currently nobody wants to buy them) and the people won't strand in May or June but August or September.

AirCub1

Looks like Renzi has been re-elected. That could be good news for AZ.

malmostoso

As there seems to be some confusion: Renzi has not been elected, but has been chosen to lead the Democratic Party. There are no general elections planned in Italy at the moment, and while Renzi could influence the current government, he has no direct power over the government's decisions at the moment.

dh01

While he officially has no direct power over the government, as the party leader of the main party leading the government, with an eye on elections within a year, the temptation is clearly there for him to find a way to "save" the airline and jobs, rather than go to elections having let the company fail and 12000 jobs be los, under a PD-led government

malmostoso

Without going into OMNI/PR territory, I think "saving" AZ would cost more votes than the 50k (optimistically) it would earn from AZ staff and their friends and families.

Additionally, I don't think that all jobs would be lost. Pilots will be hired by LH to be used as bargaining tool against their current staff, and flight attendants will go to FR and VY for minimum wage (only paid gate-to-gate, of course). Sadly sarcastic.

rje444

Which of these positions is correct should be known quite soon, as Renzi has stated that his plan to save Alitalia will be made public by May 15th.

Unless he meant May 15th 2047.

ulxima

Unions backed the plan so this vote by AZ employees was not a victory for them.
This is a movie we have already seen other times (last replica was in 2008) and Management has never been held accountable.
To let Pilots and FAs to pay for it and to blame them is not correct. It has been since the seventies (when the first known data leaked out) that AZ pilots and FAs have among the lowest payrolls in Europe.
Starting 2008 many of them have been able to make like-for-like comparison in real time:
VY vs AZ
U2 vs AZ
QR vs AZ
EK vs AZ
EY vs AZ
FR vs AZ
CX vs AZ
and so on (the airline list for AZ 2008 diaspora is long).
I congratulate them for this time they stand up against something that is everything but a business plan. I hope they will continue to stand. Those who voted NO are aware of their fate and the message is clear: it is better to let AZ die in dignity and leave the management of commercial aviation to professionals which seem not to be based in Italy (and perhaps not even in UAE).

As far as I am concerned, I had enjoyable flights and experiences with AZ (LAI and CAI) the vast majority of times.
I have been CFA when it was their top tier but I was one of those living in the north-east of Italy who succumbed to MXP fiasco and turned the business elsewhere (LH first and AF/KL after).
I obviously hope not but I am afraid I am going to miss that feeling of happiness/hate of being home while stepping into those tricoloured A shaped tail planes at LCY and LHR.
It is also sad to see one of the most beautiful, elegant and adaptable airline liveries ever made to disappear :-(

Ulxima