Analysis: The reinvention of Alitalia

29 Oct 2016 by BusinessTraveller
Alitalia Aircraft

In January 2015 Etihad, the national state airline of Abu Dhabi, bought a 49 percent share in Alitalia, the national state airline of Italy. It paid €560m. No one could say it is scared of a challenge. Alitalia was founded in 1946, and yet has made profits in only one year – 1998.

In June 2015, a slightly modernized brand identity was unveiled. Alitalia kept the iconic stylised green-red A in the aircraft tails, introduced originally in 1970 for the first Boeing 747. Then this summer new elegant uniforms by Milan-based designer Ettore Bilotta were unveiled –  red for flight attendants and in green for ground staff.

Brand is important – as is perception of the airline, but it will take more than a new logo and smartly dressed staff to turn around Alitalia. So now, almost two years into the Etihad investment, what has changed?

The fully-flat business class seats on Alitalia’s 24 long haul aircraft, 14 A330-200s and ten Boeing 777-200ERs.

These are the same Sogerma Solstys seats that were formerly flying in Etihad cabins (and now also being flown by Air Berlin or Iberia).

They have been upgraded for Alitalia with an elegant cover of fine leather by iconic brand Poltrona Frau.

Firstly, in terms of business class, there are the fully-flat business class seats on its 24 long haul aircraft, 14 A330-200s and ten Boeing 777-200ERs. These are the same Sogerma Solstys seats that were formerly flying in Etihad cabins (and now also being flown by Air Berlin or Iberia). They have been upgraded for Alitalia with an elegant cover of fine leather by iconic brand Poltrona Frau.

This is all part of a heavy investment from Etihad. Some €400m alone were invested in 2016, of which €240m went into the aircraft and refurbishment of cabin interiors on long haul. Yet it is important to those working at Alitalia that it is still seen as an independent airline and not a branch of Etihad, as critics have argued.

Alitalia's Aubrey Tiedt

Aubrey Tiedt, Alitalia’s Chief Customer Officer

If the turnaround should happen one day, it will be to a large part also thanks to Aubrey Tiedt, a charismatic, fast-talking Irishwoman with over 25 years of industry experience who is now Alitalia’s Chief Customer Officer. Tiedt has created brands for the Etihad group such as Air Serbia or Etihad Regional and given major makeovers to others like Air Seychelles. When Etihad took a stake in Alitalia it was clear the brand couldn’t be revived from Abu Dhabi. So Tiedt moved to Rome in 2015 on a three-year contract and started her work.

“The objective of the EAP – Etihad Airways Partners – is to have a seamless experience for our guests, however keeping the personality of each airline”, underlines Tiedt. She stresses time and again that there isn’t unlimited Etihad money available for the airline, or as she puts it, the things she would love to have but can’t afford, from a spa in the lounge to virtual reality for crew training.

“We are only half way into our turnaround with another 18 months to go, it’s not like we have plenty of money, so we have to be innovative.”

Alongside Australian Cramer Ball, the new CEO, who also hails from the Etihad universe and was seconded to Rome to finally achieve the profit zone by 2017, the goal is profitability, not breakeven, something they believe will happen in 2017.

“Our goal is not just to be good. It's to be the best at what we do." - CEO Cramer Ball

Doing so means improving every aspect of the airline, from the product and the service to punctuality.

Tiedt and her team have found they can draw on experienced staff in aiming for this. The average age of the 3,500 cabin crew members is 38 years, unusually high for the industry, and this wealth of experience they regard as an advantage.

Despite hard times and repeated near-bankruptcies, the loyalty of employees is high. Now the aim is to bring out abilities, talents and self-confidence again that had been long lost or neglected.

“Our crews are knowledgeable, they have experience, but there was zero confidence before”, observes Tiedt. “And if they don’t have the confidence to use their potential, nothing happens.”

Tiedt likens Alitalia to an unpolished raw diamond at the time she started.

Alitalia Casa Lounge

One of the most important investments was the opening of the “Alitalia Excellence Training Academy” in Fiumicino. Incredibly there was never anything like it before. One of Europe’s biggest airlines simply didn’t do any training for crews and other service staff in dealing with customers.

“It ended in the early 1990s, afterwards there was just safety training and refresher courses as well as initial training for beginners. otherwise you would just train on a computer or it was simply learning by doing”, says Barbara Accardi, Senior Manager at the training centre.

“Service training was just regarded as a cost factor then, and costs always had to be cut, while today it’s a totally different philosophy and it’s seen as investment.”

Interestingly, Alitalia did not only not hire new crew members, but also no outside trainers. Instead, employees could apply to become trainers, and 300 wanted to coach their colleagues. It’s also a novelty to train ground and cabin staff in integrated classes of 16, providing for interesting insights and mutual understanding. All people involved in the service chain, even the drivers of Alitalia’s own passenger buses on the ramp, got trained here since September 2015.

“Training is supposed to be fun, not boring”, says Barbara Accardi. That’s exactly what the visitor encounters, for example in the room where the ladies learn how to apply make-up. There’s even a new corporate lipstick in the colour “Rosso Alitalia”, created by Diego Dalla Palma in Milan (soon also available in retail, if you like it).

Or at the food presentation, where almost everything on any plate or in any glass hails from Italy. “We can draw on this Italian-ness, hospitality is already there, the people are very warm, family-oriented, love good food, everywhere in the world people love Italy, that’s a big asset”, finds Aubrey Tiedt.

Even if not all is smooth sailing at Alitalia yet (the recent strike threat of the pilots made that clear), first achievements become visible: The market share of Alitalia on flights to and from Italy rose by four percentage points to 30 percent in 2015. In May 2016, customer satisfaction was at 91.4 percent, the highest score since surveys started in 2012.

“It’s a completely different airline than twelve months ago, how the staff behaves, how they talk, how they walk, it’s been a tremendous change”, states Aubrey Tiedt.

“We now have to build more of a consistency across what we do, and review the offerings on our narrow body and short haul fleet. We need more investment on our digital side and finish to equip the rest of the 777 fleet with connectivity, also there are two big lounges coming up here in Rome.”

Alitalia Casa-Alitalia-Roma

These new lounges are now called “Casa Alitalia” and have a similar concept to Etihad’s, working with open kitchens. In Rome and Milan-Malpensa, pasta and pizza are freshly prepared on the spot. Alitalia won’t be such a quick fix, but with the determination of its employees and management, and yet more investment, 2017 may be yet be the year it hits a return to 1998 and makes a profit.


Andreas Spaeth

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