Alitalia Bankruptcy?

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  • transtraxman

    It certainly surprises me that nothing has been said specifically about Alitalia since January.

    This article has appeared today 1 October in CAPA……..
    “Alitalia may need to seek (another) last chance as funds shrink.”

    The title of the article says it all. Does this mean the long expected demise of Alitalia? By the end of the year??
    Berlusconi is no longer in charge, in fact his coalition is breaking up, so will not have so much influence as before over the outcome. The arm twisting of reluctant shareholders is no longer an option.
    Thus the net result seems to be either (a)bankruptcy/liquidation or (b) a strategic investment by Air France/KLM or some one else.

    An interesting few months await us.


    AF/KLM control 25% of Alitalia shares, and as in the information above, have deferred a decision to fund them further, whether by buying a greater stake, or raising cash.
    The Board met just a few days ago, and the KLM side were pretty anti providing any further payments to Alitalia, or taking greater shares,

    Do not forget that 18% of AF/KLM is held by the French Government, so it is highly unlikely to “go bankrupt”. A re-structuring or amalgamation with another Airline is far more likely, perhaps with the name “Alitalia” disappearing.

    Etihad have been rumoured in the Italian press to be interested to take a stake in Alitalia. They have done this with several other Airlines, then influencing the Boards and direction of that Airline, in line with their own strategy, complementing Etihad’s influence.

    One thing is obvious, Alitalia is not a successful business or Airline, and needs to be radically restructured, or absorbed by another Airline who can run it more effectively.


    As other airlines, it takes ages to move from the state run company to a private one..
    Taken over by AF-KLM? No cash for..
    On top of that Emirates enters the game on Milan-New York, this will help Alitalia a lot
    I hope they will not collapse.
    I flew them some times. The service is far better than Iberia and their staff pleasant and committed.
    The new service on long haul is just great.


    It’s hard to imagine today … but when I worked in the travel business in the 1970s, Alitalia was a dynamic airline and Rome was marketed as an important aviation gateway for Africa, the Middle East and Asia.

    With the right political will plus investment and a strike-free workforce Rome could have become a major European hub.


    @ AMcWhirter – 01/10/2013 11:52 GMT

    The FT reported “Alitalia approves €100m capital increase” on 26 September 2013 that:


    Alitalia approved a capital increase of at least €100m on Thursday as Italy’s loss making airline called on its shareholders and creditors to keep the company going until negotiations are resolved that could lead to a foreign takeover. Analysts described the amount, half what officials had earlier indicated was needed, as just a breath of oxygen that would give the airline more time to work out a possible takeover by Air France-KLM, its largest shareholder with a 25 per cent holding.

    While the board held a lengthy meeting in Rome and reported losses in the first half of this year of €294m, up from €201m in the same period in 2012…

    Alitalia risks once more becoming a political football. As the then state-owned airline headed for bankruptcy in 2008, Silvio Berlusconi, leader of Italy’s centre-right, blocked a possible takeover by Air France, pledging in an election campaign to keep the flag carrier under Italian ownership.

    As one European diplomat said on Thursday, Alitalia would have been several billion euros better off if it had accepted the French offer at the time. Instead, it was taken over in 2009 by a consortium of mainly Italian investors press-ganged by Mr Berlusconi, who are now reluctant to commit further funding. ENDS.

    But with the kind of political economy pursued by Berlusconi and his ilk – business by bribery and tax evasion, both of which he’s been convicted of – there clearly was neither the vision nor the determination to do what was necessary, be that at AZ or across swathes of Italian industry and commerce.

    Having just returned from Italy, Snr. Management I were struck by being told at one Agriturismo auberge we stayed at that they had no idea what either their tax rate was or the tax to be paid. So they were unable to plan ahead because they were in complete limbo about the fiscal regime. Presumably, this is not unique, in which case, what a way to run a country!


    “”Our conditions for helping Alitalia are very strict. If the conditions are met, I am ready to go ahead,” Air France-KLM chief executive Alexandre de Juniac told French daily Les Echos on Tuesday.”

    It looks like the bargaining has begun with AF/KLM stepping into the ring, ready to take over Alitalia.

    “Air France-KLM May Help Alitalia “

    Airwise/Reuters 1 October 2013


    I am pretty sure they will be one very soon.

    I might get the chance to speak with Mr. Peter Hartman (VP of AFKLM) very soon. I have some Questions in mind already, especially regarding this topic. I shall post it here. 🙂


    It seems Alitalia is now on its last legs financially, with the possibility of it fuel suppliers refusing to continue , if their bills remain unpaid.

    The next 2 weeks could see Alitalia fail, and go into Bankruptcy, or be taken over.

    (News taken from a share link site for AF/KLM posted today.)


    I can’t help but think that bankruptcy would be no bad thing and then a fresh start with new contracts and all as should have been done five years ago.

    I don’t think that rescue options should be restricted just to AF/KL. There are others out there who may be interested.

    Will Iberia be next?


    According to a Dutch news program ENI, the Italian oil company, will stop supplying fuel and services Alitalia.

    It certainly looks like the end is very near.


    @ JohnHarper – 09/10/2013 11:12 GMT

    The seismic shock to the Italian economy of such a move will be very interesting to watch. Berlusconi, in common with a succession of his predecessors, ducked the issue some five years ago and in denying AZ’s management the opportunity to tackle the manifest inefficiency and over-staffing across the airline, probably ensured that AZ has run out of runway.

    The question is, is Italy going to end up as the second country with Flyanscare as its de facto national airline, the other being Hungary….?


    I was surprised to read that they only employ 14,000 people.

    Would also add ,where does it leave AF/KL’s reputation., ..and Skyteams as a whole ?

    And AD….you’re right…..Italy’s reputation as a tourist and business destination is going to be harmed if FR become their No1 carrier.


    All the alliances have now seen a player or two go to the wall – OW Malev, *A Spantax and particularly damaging Ansett so if AZ goes it is no reflection on the alliance and ST will survive as will AZ/KL.

    The more interesting bids might come from Germanwings and Vueling, not FR by any means but not full service either, both sitting on the edge of an alliance whihc would lend connectivity to the operation. I can’t think of a similar ST proposition.

    Germanwings would seem the stronger of the two because connections to LX, OS and LH would generally be shorter in duration and of course there is the presence of Air Dolomiti as an established Italian brand as a lead in.


    Is Air France overextending itself subsidising Alitalia losses? €1million loss every day seems a lot?


    Alitalia’s Board meet today.
    If they cannot come to an agreement, they will default on debt and outstanding fuel bills, and the Airline could be grounded by the weekend!

    Pouring money into it without a re-structuring plan seems futile, and very short term. It needs a long term financial and restructuring strategy, to return it to profit.

    As an AF / KLM share holder, I think we have enough on our Company’s plate, than taking on another Company with more debt and more problems. Clearly, significant change is needed at Alitalia. Even though our 2015 turn around plan is working, and we shall be in profit again by end of 2013, it is still a turbulent time, and the Airlines Management are busy enough.

    KLM /AF could take it on for virtually nothing, as Etihad are also waiting in the wings, but if it does go under, then the low cost Airlines will jump in overnight. This happened with the decline of Czech, Malev failing, Easyjet and Ryanair aircraft now are the most common to be seen in Budapest, having taken the business quickly.

    So we should know more by tomrw, for the short term finances?

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