Alitalia: rebirth after near bankruptcy

[LX-LGX]

But hey, I still think as well Berlusconi or the Italian Unions might come up with a last minute solution. I know my Italian friends (quite a few of them active in trade unions) and they might just play until the very end to simply get as much as possible out of the new investors. It did not work with AF, but the tactic might work with its Italian countrymen.

No, it won't: it's too late for the unions (unions = the total 9 of those unions involved).

When the unions rejected the AF/KLM bid, many here couldn't understand why. But yet, some thaught they had a plan. When the unions rejected the CAI offer a first time, the number of people with confidence in the unions became less. When the unions declined the final deadline, clearly announced by CAI as being the final bid, only a handful of hardliners probably understood why.

The reason why it's too late is simple: lack of passengers, brand name which is totally burnt. Since the unions have rejected AF/KLM, the number of passengers having confidence in AZ has declined. Since the unions have rejected also the final CAI bid, AZ is virtually dead. Who is still using them? Frequent flyers, who want to take up their free flights. Code sharing passengers, knowing that the issuing airline has to take care of them. Last minute bookings, paying just before departure. Tourists from another continent, totally unaware that something is going on with AZ. If they are stranded, one will have to explain them in which country they are.

Berlusconi should go as well. A promise is a general concept and there is no defence saying: "well, In Italy when we make a promise we mean the opposite".

See above : Berlusconi had a rescue plan. The only thing one can blaim him, is that he didn't predict that the unions would prefer that the whole company went down, rather then admitting defeat and accepting the job cuts that AF/KLM and/or CAI wanted.

[Charlie Roy]

Bru-FCO-NCE

Forgive me nosyness, but why choose the long way to Nice over flying there directly with Brussels Airlines or Easyjet?

[BelgianBoy]

For one very good reason. My last free ticket as frequent flyer was valid till end of June and my wife flew to NCE by Easyjet.

It was also an opportunity to spot twice four hours at FCO.

I was sure that someone would rise the matter.

Cheers

Willy

[LX-LGX]

ENAC (Italy's CAA) has treatened to withdraw tle license on Thursday.

http://www.ansa.it/opencms/export/site/ ... 59479.html

[teddybAIR]

I repeat the statements I made earlier the way Alitalia negotiated with multiple potential business partners: there was one line along which Alitalia has been consistent throughout the last year: the shear lack of business sense and self-evaluation. They failed to realistically evaluate their own bargaining position, resulting in often arrogant behaviour towards potential business partners.

In general I think we can agree that most potential partners at some point felt that their was no willingness from Alitalia to strive for a win-win situation. Instead, Alitalia tried to maximize its own fortune, neglecting the possibility that investors would turn their back on them.

The debacle proves one of my most firm principles in doing business and that is to treat your partners as precious assets and strive to achieve common goals. There is no point in trying to partner up with companies who have goals that are not aligned with yours…it will maximally result in short term profits, but in the long run it will do you more harm than good.

I feel sorry for the employees who do not feel themselves represented by the unions, since the unions have played a dramatic role in the final outcome. They have to realize that any business decision comes with advantages AND disadvantages and that a trade-off will always need to be made. As mentioned earlier by another member of this forum: “there is no such thing as a free lunch!”

[regi]

Would the responsable of the trade union that helped collapse the final effort, also be given a nice job in politics- ref. the Sabena outcome and Inge Vervotte ?

[Air Key West]

Well, Berlusconi who did nothing during his first term of office to turnaruound State owned Alitalia although he had five years to do so, and Berlusconi again who was against the only good deal for AZ, the AF-KL offer has been given a very good job in politics.

[LX-LGX]

Well, Berlusconi who did nothing during his first term of office to turnaruound State owned Alitalia although he had five years to do so, and Berlusconi again who was against the only good deal for AZ, the AF-KL offer has been given a very good job in politics.

I really think that the unions have killed Altalia. But if it has been politicians: it was Berlusconi's precessor, Romani Prodi, who was in charge of Alitalia during the period it went terribly wrong = 17th May 2006 till 8th May 2008.

Berlusconi indeed regarded the AF/KLM offer as hostile, but he was not prime minister yet when that bid came in, and he was not yet prime minister when the decision had to be given to AF/KLM. Berlusconi's plan came later: his CAI take over bid would keep (make) the (new) company Italian. But at the end of March 2008, it was the unions who rejected the KLM/AF take over bid.

[Air Key West]

At the end of March 2008, indeed, the unions rejected the AF bid, but you forgot to mention they did it, inter alia, because during the electoral campaign at that time Berlusconi was against the AF offer and promised to keep AZ Italian and said he had a better deal from a group of Italian investors. In the end Berlusconi's "better" deal (CAI) meant even more lay-offs than the AF offer. And don't forget Prodi was the one who granted the (probalby illegal) 300M loan in May 2008, just before handing over power to Berlusconi, and without which AZ would already have been grounded. The unions share the responsibilty for the present situation, but they are not the only ones responsible.
Spinetta was probably right when he said that AZ needed an exorcist. Now, it seems highly likely that the Italian CAA will withdraw AZ's licence next Tursday. My bet (just a bet) is that the airline will be grounded and in the midst of the total chaos, someone (LH ?) might offer a recue plan on his own terms. Or it will be a total repetition of the sabena scenario : a new (very) smaller airline created by CAI on the ashes of AZ (like snba after sabena). But maybe my guess is completely wrong.

[sn26567]

The four large unions (CGIL, UIL, CISL, UGL) have finally agreed that Alitalia be taken over by CAI. CGIL, which was still opposed to the deal until today, changed their mind this afternoon. But the five smaller unions representing the pilots and cabin crew were not present at the meeting. They have until 8 pm to accept.

Air France-KLM could take a 10-20% share in the capital of the new company. British Airways and Lufthansa are also said to be interested.

[euroflyer]

But hey, I still think as well Berlusconi or the Italian Unions might come up with a last minute solution. I know my Italian friends (quite a few of them active in trade unions) and they might just play until the very end to simply get as much as possible out of the new investors. It did not work with AF, but the tactic might work with its Italian countrymen.

No, it won't: it's too late for the unions (unions = the total 9 of those unions involved).

Sometimes I really hate to be right , but that seems to be the way this country works, Alitalia will never be dead Always close to it, but not one step further ...

[JAFflyer]

My thoughts exactly...

[Air Key West]

Euroflyer, there is nothing wrong about being right. However, the final deal is not sealed yet, but it seems difficult now for the pilots not to sign the agreement, too.
Unlike those who pray on their knees for AZ to disappear, I'll be glad if the airline is saved, mainly for the sake of the thousands of employees who might have lost their jobs. And unlike some, I have not found AZ employees worse or better than those of other airlines (well, I agree some airlines do better than others) but I have made terrible experiences with staff of AF, KL, BA, BM, TP etc... I have not flown AZ a lot, but when I did it was OK and sometimes very good (like a Business class trip with them to Buenos Aires : very pleasant crew, good food and comfortable seats at a competitive price). So, I hope the pilots are going to sign, too, and that the airline will keep on flying and thousands of people will keep their (often) hard jobs. And as you rightly said : Italians have their own way of doing things.... We should have the final answer by tomorrow afternoon (Thursday).

[fc82091]

seems like air france-klm is going to take 20% of the shares afterall
if you ask me its 200 milion dollar they dump in a bottomless pit

[Air Key West]

Apparently, flights attendants are considering accepting the agreement.
Pilots still hesitant and negotiating.
More next Monday !
LH CEO met with Italian government representative today.
AF-KL prepared to accept 10-20 % minority share.
AZ employees are starting to realise that the deal announced by Berlusconi, his famous "cordata" (group of Italian investors) which became CAI (Compania Aerea Italiana) is offering less favorable conditions than AF.
Some are saying (namely the pilots) : we have been cheated upon. But then, the unions (did they really represent the majority of AZ employees) together with Berlusconi rejected AF's offer. Berlusconi rejected it because he wanted AZ to remain Italian (save AZ's "italianità"), but in fact he just wanted to offer a new Alitalia to his Italian business friends. And the unions that rejected AF's offer were just fighting like they did 100 years ago ; they failed to adapt to the 21st century, unlike unions in Germany or Scandinavia for instance. "La grande confusione" is going on. Too bad.

[euroflyer]

Indeed German media is reporting as well the LH CEO is in Italy today and he obviously met already with government AND all AZ unions

I always thought (feared ) AZ would find a new way to survive, but I still cannot believe LH is seriously considering taking a stake in AZ. Hey, they are about to take over SN, BMI and have open announced they are interested in AUA and in SAS as well in principle. They have a lot of money, ok, but they cannot be able to buy every damned Airline in Europe

[Air Key West]

I agree. But if Mayrhuber was in Rome, it's maybe because if the deal goes through, LH will loose its Star Alliance Italian member AirOne, unless LH beats AF-KL. But then, AirOne is a minor player (I think) and LH is already setting up its own operations in MXP through Air Dolomiti. Maybe LH is just curious and it never hurts to talk. And as far as I know, only b.air and BMI are pretty sure to go to LH. Nothing has been decided as regards OS (AF-KL is also interested) or SK (but I may have missed some recent info).
For the sake of balance (and competition), I would prefer AF-KL to take a stake in AZ and OS. If LH gets these two airlines on top of LX, SN, BM, SK, they will become too dominant, which will be bad for us pax.
The Italian government would prefer a partnership with LH, in my view, for two reasons :
1. generally speaking, Italians prefer the Germans over the French;
2. Berlusconi and the unions already kicked out AF-KL, so it's psychologically difficult to ask them in again, but if LH says "no", it's better to have AF-KL on board than remain alone without a strong international partner. And several years ago, AZ and KL got married, but divorced very quickly.
The saga goes on. Maybe we should, however, change the title of this thread into "Alitalia : is the end near ?

[LX-LGX]

Maybe we should, however, change the title of this thread into "Alitalia : is the end near ?

Fact: Alitalia had a turnover of 4,2 billion euro in 2006 (in Dutch: 4,2 miljard - in Frernch: 4,2 milliard).

Fact : Alitalia today has a debt of 1,2 billion euro.

Conclusion : no one from AF, KLM, LH, CAI, Intesa, ... will ever invest in such company: it will take at least 20 years before a return on investment is possible.

When all parties agree, Alitalia will be split up into 2 companies: one with the profitable parts (like slots), and one with all the debts and the loss making parts (like Cargo). Only after that split, some of the above companies will invest in the healthy part.

The question one could ask about a name change therefore is: what will be the name of the new company: "Alitalia", or "One Alitalia" or "CAI-Italia" or "New Alitalia" or ...

[beaucaire]

The pilots have accepted the rescue project last night and clearly favour a deal that would allow LH to take a stake in CAI.Reason being clearly LH operates a multi-hub system throughout their network and alliance-partners.
If they get to clinch a deal next week with CAI,it is more likely they will either drop interest in AUA or SAS-they never can take on all the airlines they've been interested in.Brussels anti-comeptition rules would prohibit this scenario anyhow.
But that will automatically put pressure on Air France to gain control over AUA and/or SAS-although Air France nevere indicated any particular interest in the Scandinavians.BA will not play any significant role in the European consolidation scenario other than the control of Iberia.

[YYZ727]

I flew AZ quite a bit in the nineties and never had any particular bad flights. They were quite mainstream to me...