[LuganoPirate]

I suppose they have to redistribute their oil money somewhere – why not in AZ?

[transtraxman]

The first steps in the Alitalia foxtrot.
“Etihad Mulling Alitalia Investment”

http://news.airwise.com/story/view/1386807016.html

One paragraph is of particular interest…
“Etihad recently bought a third of Switzerland’s Darwin airline and a good portion of their fleet serves destinations in Northern Italy,” ….. “It will be interesting to see what can be done between Alitalia and Darwin.

Will AF/KLM counter that?

[dutchyankee]

Hi LP,

Loved your post, `I suppose they have to redistribute their oil money somewhere – why not in AZ?` but I would have to question why anyone would want to pour good money after bad. AZ should be allowed to go under, it has been having a slow, painful death for years and should just be put out of everyone`s misery. With the Italian Unions being what they are, every government terrified to defy them, just let it go under. Sabena was a similar case whereby it was seen as a government tool, a place to give favors to friends of friends of friends ….., etc., and was allowed to lose hand over fist year after year (SN only had one profitable year in its over 70 year history). Sabena should have collapsed years before it finally did, even though tragically it took Swissair with them (had only Swissair been more clever with their investments, they might have survived the travel downturn after 9/11). I know there is more to the story on all counts, but in short, we should put a dying dog out of its misery, not keep it alive to just die more painfully later.

[LetsFlyNow]

Etihad being very bold.

Then again, Air Berlin was in terrible shape and is still struggling with it’s balance sheet still in the red. Will probably need a new cash injection from stinking rich uncle Etihad (if a recent CAPA analysis is anything to go by). Not yet out of the woods but moving in the right direction.

But Alitalia…..though who knows… desperate times call for desperate measures. Will the unions cave in or will the recent cash injection that ensure AZ stays in operation for atleast 1 more year continue to strengthen their stubborness?

If Etihad does actually take up to 49% then that will most certainly make Etihad a massive player in Europe. Alitalia could get cash to buy/lease new planes for lucrative long haul routes. AF/KL probably won’t do anything as they are as broke as church mice. I imagine Etihad would get Alitalia at a throw-away price.

Anything new on the flirting going on between LH and EK? Those two are ending up in bed together!

[AnthonyDunn]

I’m not particularly au fait with either Italian tax law or charity law but how about de-registering AZ as a conventional company and, instead, setting it up as a charitable foundation whose sole purpose is benefiting its own staff? Then, presumably fares paid and the next cash injection can be seen as a tax deductible charitable donation…?

There again, on the basis of what I was told about the Italian tax system earlier this Autumn, this might not be such a fanciful/farcical suggestion!

[MarcusUK]

13 Million passengers flew with Easyjet to and from Italy last year (post as from BT a few days ago).

http://www.businesstraveller.com/news/100047/easyjet-to-expand-rome-fiumicino-operation

Alitalia have no hope of rejuvenating their domestic network, and many other Airlines are already now flying from their main hubs long haul, EK and EY included.
They have failed to make a profit for 20 years are whatever is done will continue to fail, shame that it maybe.

And as a shareholder of AF/KLM, i can tell you they are far from broke as church mice! Plenty new orders for aircraft and KLM’s fleet have almost totally been renewed in the last 5 years with new cabins and seating being fitted across the whole network. they have made a profit of over Euros Mil. 650 in the 3rd 1/4 this year, and my shares have brought about 40% increase.

They especially the KLM side, do not believe in investing more money in a failed Airline.
It is quite clear, that Alitalia’s business has gone to Low cost Airlines in Europe and will further decline, and they simply have not the capacity or finance to compete with other Greater Airlines for long haul services. They have been squeezed out, have a huge question of viability, when they will be grounded, and yet still refuse to change the Board or strategies needed to even have a hope of survival.

Etihad only appear to invest in Airlines that have not lost business to the low cost and hold some of their market, and have some hope of retrieval from Financial disaster. Alitalia does not qualify, and KLM have dismissed any further cash to this loss making Airline.

KLM’s fleet and services are better and stronger than they ever have been, and profitable, certainly not suffering from any “church mice poverty”!

[WillieWelsh]

KLM do indeed seem to have it right and with their phased plan to alter costs within Europe they are well ahead of the game.

As for Alitalia, has anything really changed over the last 20+ years? They’ve changed the curtains a few times and their current fleet is smart but their cost base is still all wrong. With Easyjet looking to expand at FCO their days must really be numbered.

[Swissdiver]

Swissair went under a decade ago for a number of reasons. One of them was to believe it could buy a couple of companies in France, restructure them quickly and efficiently and make them profitable. Not! Not is a country with very rigid employment laws such as France, or Italy for that matter. Lesson learned by others I guess. Etihad had a chance with a German company, not with an Italian one.
AF/KL made a proposal, a harsh one, but probably the only one that could have a chance to work. Refusing it was mad although expected. Now I am afraid we will see Alitalia going under as well. It is only a matter of time.

[Ab0dache]

Hello Swissdiver,

The former Swiss International Airline, and before at Swissair, PR guy has stated – when he was invited one year or more ago the day before he retired on the swiss national television broadcast TTC programm – the grounding of Swissair was the consequences of the refusal of the Swiss banks (one or both of the two big ones) to give Swissair the on-going loan it needed at the time to survive. In other words the swiss banks wanted to kill Swissair.

I do not think the investment in Sabena and the small French airlines has killed Swissair. I belive here there is more than a questionnable attitude from the swiss banks knowing those banks have cried one decade after in front of the representants of the Swiss people they should be helped not to disappear… with billions of swiss francs of course…

Am I not correct?

[Swissdiver]

Hello Ab0dache,
Banks, and to a certain extent the Swiss Government (that eventually invested CHF 1bio in Swiss before selling it for nothing to Lufthansa!), let Swissair down and triggered the grounding (right after 9/11). This was however only the last chapter of a sad story of a number of successive mismanagements. Swissair’s board and management pursued a hunter strategy that was far too aggressive for a rather small company. So with leverage, they acquired the three French airlines (and Sabena) they wanted to restructure but could not. Ultimately Swissair ended up it a CHF 6+ bio debt and unmanageable subsidiaries to face one of the worst crisis the airline industry had to face.

[Ab0dache]

Yes Swissdiver, I am with you now after your explanations.

I wonder too if Alitalia is going to make it.
Etihad seems to have invested in their last funding. Are they going to use maybe some of the Alitalia planes/crew for their route to Abu Dhabi?

[AMcWhirter]

According to this Swiss aviation website, an EY deal with Alitalia may be announced at the end of the week.

http://www.ch-aviation.ch/portal/news/24228-etihad-to-inject-413mn-into-alitalia

[AMcWhirter]

atwonline.com/finance-amp-data/cash-injection-alitalia-finalized

Alitalia’s immediate future safeguarded, reports ATW, thanks to a cash injection.

[DavidGordon10]

I expect many of us who write on this forum have had various email seasonal greetings from the airlines we use.

So, I have seen BA, SAS, KLM, CSA in my inbox. But gmail chose to put the greeting from Alitalia straight into my spam folder. What does Google know that we don’t…..?

[Shearer]

No, really.

http://www.euronews.com/business-newswires/2282504-italys-alitalia-seeks-more-bank-funding-paper/

[Author]

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