Alitalia in trouble...?
#1
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Join Date: Jul 2000
Location: AUH
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Alitalia in trouble...?
On FT.com: Link
Alitalia may have to consider liquidation
By Tony Barber in Rome
Published: June 11 2004 11:23 | Last Updated: June 11 2004 11:23
Alitalia's future was thrown into question on Friday after Deloitte & Touche, its auditors, said the financially struggling Italian airline might have to consider some form of liquidation unless it took urgent recovery measures.
The auditors' assessment was contained in a statement that said they were unable to approve the airline's 2003 financial results because of significant uncertainties over how Alitalia intended to return to health.
Deloitte & Touche had first indicated that it would not be able to approve Alitalia's accounts on May 20, when the airline reported a net loss of 520m for 2003.
In the first quarter of this year, Alitalia had a pre-tax loss before one-off items of 206m. The airline's cash reserves fell to 256m at the end of March, from 515m at the end of December 2003.
"As in the past, the company in 2003 sustained big operating losses and its financial situation grew worse," Deloitte & Touche said. "This negative development continued in the first months of 2004 and, in the absence of incisive and adequate measures, could force . . . other solutions, even ones related to liquidation."
(cont'd in the link)
Alitalia may have to consider liquidation
By Tony Barber in Rome
Published: June 11 2004 11:23 | Last Updated: June 11 2004 11:23
Alitalia's future was thrown into question on Friday after Deloitte & Touche, its auditors, said the financially struggling Italian airline might have to consider some form of liquidation unless it took urgent recovery measures.
The auditors' assessment was contained in a statement that said they were unable to approve the airline's 2003 financial results because of significant uncertainties over how Alitalia intended to return to health.
Deloitte & Touche had first indicated that it would not be able to approve Alitalia's accounts on May 20, when the airline reported a net loss of 520m for 2003.
In the first quarter of this year, Alitalia had a pre-tax loss before one-off items of 206m. The airline's cash reserves fell to 256m at the end of March, from 515m at the end of December 2003.
"As in the past, the company in 2003 sustained big operating losses and its financial situation grew worse," Deloitte & Touche said. "This negative development continued in the first months of 2004 and, in the absence of incisive and adequate measures, could force . . . other solutions, even ones related to liquidation."
(cont'd in the link)
#2
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Originally Posted by stargold
On FT.com: Link
Alitalia may have to consider liquidation
By Tony Barber in Rome
Published: June 11 2004 11:23 | Last Updated: June 11 2004 11:23
Alitalia's future was thrown into question on Friday after Deloitte & Touche, its auditors, said the financially struggling Italian airline might have to consider some form of liquidation unless it took urgent recovery measures.
The auditors' assessment was contained in a statement that said they were unable to approve the airline's 2003 financial results because of significant uncertainties over how Alitalia intended to return to health.
Deloitte & Touche had first indicated that it would not be able to approve Alitalia's accounts on May 20, when the airline reported a net loss of 520m for 2003.
In the first quarter of this year, Alitalia had a pre-tax loss before one-off items of 206m. The airline's cash reserves fell to 256m at the end of March, from 515m at the end of December 2003.
"As in the past, the company in 2003 sustained big operating losses and its financial situation grew worse," Deloitte & Touche said. "This negative development continued in the first months of 2004 and, in the absence of incisive and adequate measures, could force . . . other solutions, even ones related to liquidation."
(cont'd in the link)
Alitalia may have to consider liquidation
By Tony Barber in Rome
Published: June 11 2004 11:23 | Last Updated: June 11 2004 11:23
Alitalia's future was thrown into question on Friday after Deloitte & Touche, its auditors, said the financially struggling Italian airline might have to consider some form of liquidation unless it took urgent recovery measures.
The auditors' assessment was contained in a statement that said they were unable to approve the airline's 2003 financial results because of significant uncertainties over how Alitalia intended to return to health.
Deloitte & Touche had first indicated that it would not be able to approve Alitalia's accounts on May 20, when the airline reported a net loss of 520m for 2003.
In the first quarter of this year, Alitalia had a pre-tax loss before one-off items of 206m. The airline's cash reserves fell to 256m at the end of March, from 515m at the end of December 2003.
"As in the past, the company in 2003 sustained big operating losses and its financial situation grew worse," Deloitte & Touche said. "This negative development continued in the first months of 2004 and, in the absence of incisive and adequate measures, could force . . . other solutions, even ones related to liquidation."
(cont'd in the link)
#3
Join Date: Apr 2001
Location: Abu Dhabi UAE
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Posts: 895
Well, I think the problem is mostly cash! I suspect the same thing is going to happen as with PR and SR. On a given day the fuel supplier will decide not to provide fuel anymore. At that moment all suppliers stop deilveries and your airline is t*ts-up! No matter how many politicians get involved.
When they are belly-up, the EU is going to make certain that the restart is not a state aid project.
Anybody who wants to book AZ, go ahead, but know the risks.
Other carriers will rescue you from the lounge if you get stuck. They also did with SR...
When they are belly-up, the EU is going to make certain that the restart is not a state aid project.
Anybody who wants to book AZ, go ahead, but know the risks.
Other carriers will rescue you from the lounge if you get stuck. They also did with SR...
#4
Join Date: Apr 2004
Location: San Francisco CA
Programs: AA GOLD
Posts: 22
Az Will Survive ????
A few facts....
Italy is one the largest tourist destinations in the world.
It is Rome, Venice, Florence --- 3 of of the top 5 destinations preferred by Travelers from Conde Naste Magazine.
Northern Italy (Milan Area) has the highest per capital Income of any place in the world.
A Relatively Dominant Domestic Position (40% Market Share)
An Alliance -- that dominants Italy, France, Netherlands...dominanting top cities in Europe.
Some well respected former CEOs who hold IATA and other European Political Leadership Positions
New Fleet of 777s, 767s, A319s, A320s
The best looking flight attendants and sharply dressed pilots.
So how does a company with these demographics fare so poorly????? HOW???? WITH ALL THESE ADVANTAGES.... Yes, there is
911
High Fuel Prices
SARS
LCCs -- Italy has more than France, Germany and most European Countries.
The answer is POLITICS....AZ is 62% owner by the Italian Government..Its employees...well....have you ever flown them in Y...well they act and treat passengers poorly.
I do not like to see any company go under and people lose jobs...but I think for this Company.......it probably makes sense to sell it asap and put it on the free market...It just proves that governments in Europe or the US should not be in the business of running companies.... The Italian Officials have booted 2 AZ leaders in 3 months.,,
AZ should freed at least.
CIAO
Italy is one the largest tourist destinations in the world.
It is Rome, Venice, Florence --- 3 of of the top 5 destinations preferred by Travelers from Conde Naste Magazine.
Northern Italy (Milan Area) has the highest per capital Income of any place in the world.
A Relatively Dominant Domestic Position (40% Market Share)
An Alliance -- that dominants Italy, France, Netherlands...dominanting top cities in Europe.
Some well respected former CEOs who hold IATA and other European Political Leadership Positions
New Fleet of 777s, 767s, A319s, A320s
The best looking flight attendants and sharply dressed pilots.
So how does a company with these demographics fare so poorly????? HOW???? WITH ALL THESE ADVANTAGES.... Yes, there is
911
High Fuel Prices
SARS
LCCs -- Italy has more than France, Germany and most European Countries.
The answer is POLITICS....AZ is 62% owner by the Italian Government..Its employees...well....have you ever flown them in Y...well they act and treat passengers poorly.
I do not like to see any company go under and people lose jobs...but I think for this Company.......it probably makes sense to sell it asap and put it on the free market...It just proves that governments in Europe or the US should not be in the business of running companies.... The Italian Officials have booted 2 AZ leaders in 3 months.,,
AZ should freed at least.
CIAO
#7
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Join Date: Jul 2003
Location: Yiron, Israel
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Is Alitalia in trouble? Its price list makes it seem so -- in fact, desperate trouble.
This is high season and I can fly TLV to either FCO or MXP for $299.
I can fly anywhere else in Europe for $309.
New York will cost me $599.
It has got to be losing money big time on these tickets and wouldn't be offering these prices if it weren't desperate.
In fact, Alitalia has become Israel's equivalent of a LCC -- except that I get Delta SkyMiles for flying with it.
The service? About what you would expect from an Italian government operation.
The rules? Often silly:
** It allows 4 kilos in hand luggage (about the weight of an empty wheeled piece that meets its size requirements) but unlimited weight in the "personal piece". This just means I carry my laptop in the personal piece instead of the hand luggage.
** Along with Air Lingus and El Al, it is one of the few airplanes that won't allow CD players, MP3s, etc.
** FA's have a fit if you turn on your mobile phone after landing (but before the plane has stopped.) Do they really believe that the pilots can't navigate around the airport with a mobile phone working?
First Class? I have yet to figure out why anybody would pay for FC from TLV to Italy. The seats are identical -- in fact, they simply move the curtain forwards or backwards, depending on how many coach seats are needed. (They do, however, attempt to leave the middle seat empty in FC.)
The food? A tiny bit better than Y, but not much.
Alitalia should be in a great competitive situation vis-a-vis Israel. Italy is one of our favorite tourist spots and only Alitalia and El Al fly there. In addition, if I want to fly to the US and take a stopover in Italy Alitalia (or a combination of Alitalia/Delta) is my only choice.
If it would straighten out its act it could raise prices to a decent level and get out of the red. As things stand right now, the only way it is selling any seats is by offering them at a loss.
This is high season and I can fly TLV to either FCO or MXP for $299.
I can fly anywhere else in Europe for $309.
New York will cost me $599.
It has got to be losing money big time on these tickets and wouldn't be offering these prices if it weren't desperate.
In fact, Alitalia has become Israel's equivalent of a LCC -- except that I get Delta SkyMiles for flying with it.
The service? About what you would expect from an Italian government operation.
The rules? Often silly:
** It allows 4 kilos in hand luggage (about the weight of an empty wheeled piece that meets its size requirements) but unlimited weight in the "personal piece". This just means I carry my laptop in the personal piece instead of the hand luggage.
** Along with Air Lingus and El Al, it is one of the few airplanes that won't allow CD players, MP3s, etc.
** FA's have a fit if you turn on your mobile phone after landing (but before the plane has stopped.) Do they really believe that the pilots can't navigate around the airport with a mobile phone working?
First Class? I have yet to figure out why anybody would pay for FC from TLV to Italy. The seats are identical -- in fact, they simply move the curtain forwards or backwards, depending on how many coach seats are needed. (They do, however, attempt to leave the middle seat empty in FC.)
The food? A tiny bit better than Y, but not much.
Alitalia should be in a great competitive situation vis-a-vis Israel. Italy is one of our favorite tourist spots and only Alitalia and El Al fly there. In addition, if I want to fly to the US and take a stopover in Italy Alitalia (or a combination of Alitalia/Delta) is my only choice.
If it would straighten out its act it could raise prices to a decent level and get out of the red. As things stand right now, the only way it is selling any seats is by offering them at a loss.
#8
Join Date: Apr 2001
Location: Abu Dhabi UAE
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Posts: 895
Who will put down a serious guess how long they will last?
My bet is that the party will be over by Oct, or any major upheavel before that month. So Oct will be a good month for Italian tax payers!
My bet is that the party will be over by Oct, or any major upheavel before that month. So Oct will be a good month for Italian tax payers!
#11
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Originally Posted by EWANMEBABE
This is actually a vote winner in Italy to wind them and help reduce the burden on the tax payers.
If Alitalia is allowed to go belly up by the government, there will be transportaton strikes by all government workers which will close the airports, train lines, and most bus lines.
Allowing it would be political suicide by any PM, but especially for Berlusconi, who is already seen as being anti-labor.
#12
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Join Date: Apr 2004
Posts: 149
I think your wrong and I work with a lot of Italian people who are telling me that he is actually building this up as a real white elephant he inherited and there are a lot of facts and figures being passed around that show how everyone is contributing to this massive money guzzler. I am basing this on information from people who live and work from Turin across to Milan and down to Venice
#13
Join Date: Apr 2004
Location: Nairobi
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The question is how many lay-offs the union are accepted to endorse. So far the new management refused to release figures because of the elections but the next few weeks will be crucial. A new business plan is being studied, but that too is a very politically-sensitive issue. AZ currently operates a very inefficient two-hub system which it cannot afford, yet neither FCO nor MXP are prepared to take a step back because of the traditional rivalry between Milan and Rome. Given the amount of political and trade union interference, I doubt the new management will be able to produce a sound economically-viable business plan.
#14
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Originally Posted by EWANMEBABE
I think your wrong and I work with a lot of Italian people who are telling me that he is actually building this up as a real white elephant he inherited and there are a lot of facts and figures being passed around that show how everyone is contributing to this massive money guzzler.
Keep in mind the origin of the phrase. In Siam, white elephants were considered sacred and by law when one was born it belonged to the king.
Being sacred, it was not allowed to do any work -- but it still had to be fed.
When the king wanted to show his displeasure with someone, he would "honor" him by giving him the white elephant to take care of. This person could not get rid of it because it belonged to the king. He had to feed it. But he could not work it. The white elephant would cost the person a lot of money.
Alitalia is also sacred -- not because it is an airline, or even the flag carrier, but because it is a government corporation with a lot of employees. All other employees of government corporations -- especially in the transportation area -- will fight very hard to keep Alitalia alive. They are afraid of what it will mean for their own future if it goes under.
Originally Posted by EWANMEBABE
I am basing this on information from people who live and work from Turin across to Milan and down to Venice.
This is because the North is the most economically advanced part of Italy and has long felt that "the North earns the money, the center (Rome) collects the money, and the South is given the money."
While most northerners are not members of the Northern League, they do tend to be very much more economically conservative than the rest of the country.
I don't doubt for a second that Berlusconi, a Milanese, agrees with your friends. I am certain that he would love for Alitalia to disappear. But the question is whether he is willing to have that happen on his watch -- and pay the political cost for it.
#15
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Originally Posted by Dovster
The region you just described is the home of the Northern League, which is very conservative both politically and economically -- to the degree that it actually wants North Italy to be a separate nation.
This is because the North is the most economically advanced part of Italy and has long felt that "the North earns the money, the center (Rome) collects the money, and the South is given the money."
This is because the North is the most economically advanced part of Italy and has long felt that "the North earns the money, the center (Rome) collects the money, and the South is given the money."
I don't doubt for a second that Berlusconi, a Milanese, agrees with your friends. I am certain that he would love for Alitalia to disappear. But the question is whether he is willing to have that happen on his watch -- and pay the political cost for it.
![Roll Eyes (Sarcastic)](https://www.flyertalk.com/forum/images/smilies/rolleyes.gif)
I must commend your excellent knowledge of the muddy world of Italian politics, I found so far few foreigners willing to spend the extra time separating the b******h chaff so frequent in Italian media from the wheat of useful information. ^