Good News,Alitalia is saved

Alitalia Airlines is Saved:

The corona impact is huge.While many airlines are at risk of going out of business as a result of the current global situation, Alitalia is one of the few airlines that may actually be kept alive because of it.

alitalia

Alitalia being Re-Nationalized-

The Italian government has today announced a variety of ways in which they’ll provide aid to businesses, and among those is €600 million of additional funding for Alitalia. With this plan, we’ll see Italy’s Ministry of Economy and Finance form a new state-owned business to run Alitalia.

Similar to Air India, Up until recently, the government was seeking a buyer for Alitalia, and of course has been threatening to pull the plug on the airline for a long time.  The airline has been struggling for many years, though the situation has been especially dire since Etihad pulled funding.

Abu Dhabi based Etihad Airways owned a 49% stake in Alitalia, but in mid-2017 they pulled the plug, realizing they’d never be able to turn the airline around (which isn’t surprising, because I don’t think Etihad can even turn Etihad around).

In reality this is all just business as usual. While the government has been threatening to pull the plug if they couldn’t find investors for Alitalia, it’s clear they were unprepared to do that, given how many bailouts they’ve given to the airline during relatively good times.

Italy’s challenging aviation industry

I see both sides of this. On the one hand, Air Italy liquidated just weeks ago, and losing both Italian long haul airlines in a matter of weeks would have long term negative impacts on the economy.

At the same time, in many ways allowing Alitalia to liquidate and then starting a new airline is perhaps the only way that the airline could actually be reset and have a chance at being profitable.

Up until this point there has simply been a disconnect between what the government has claimed their intentions to be and what has actually happened — there’s no reason anyone would want to buy Alitalia in their current form, and keeping the airline alive for years when that’s obvious seems silly.

Then again, on some level maybe renationalizing the airline makes sense — there’s huge economic value in having a global airline, and it’s not unreasonable for a government to decide that the access to the country is worth the losses.

Summary

Rather ironically, of just about all airlines globally, it seems Alitalia is now least at risk of going out of business as a result of this global slump. The government will be once again take over full control of Alitalia.

The only question is if they’re actually going to stick to the plan this time, or if in a few months they’ll start the whole game of trying to find a buyer once again.

Source : One Mile at A Time