Alitalia: rebirth after near bankruptcy

[sn26567]

The CAI offer is also conditional: not only should most unions approve it, but also the EU should allow the bridge loan of 300 million euros granted by he Government to remain in the books of Alitalia.

[LX-LGX]

update ANSA 21h00:

If Google Translate is correct, the unions who oppose the CAI-offer have asked their members to be ready for syndical action whilst they will try to get better conditions from CAI.

Source:
http://www.ansa.it/opencms/export/site/ ... 81518.html

To translate text from Italian into another language:
http://translate.google.com/translate_t#

[sn26567]

Some further news on the Alitalia front:

After only five months of service, Alitalia will temporarily suspend flights between Rome and Los Angeles International.

Eurofly, airline controlled by Meridiana Group for 46,10%, confirms to be ready to hire Alitalia's pilots and captains.

Meridiana, the airline controlled the Aga Khan, said yesterday it had filed a complaint to the European Commission accusing Alitalia and CAI, an Italian takeover consortium, of receiving unfair state aid from the Italian government.

Roberto Colaninno, the head of the Compagnia Aerea Italiana and chairman of Piaggio motor bikes, said "There will be no more meetings" with union officials representing Alitalia's pilots or flight attendants.

[LX-LGX]

News from ANSA this evening :

- CAI is offering 1 billion euro;
- starting date for the new airline is set on 01 Dec 2008;
- pilots and three other unions still disagree;
- 16.075 employees have received their letter of resignation, whilst the new airline will need 12.639 employees to start up.

ANSA: Per beni e contratti di Alitalia Cai mette sul tavolo 900 milioni, per Alitalia Servizi 57 milioni, 7 milioni per Alitalia Airport, 19 per Alitalia Express e 17 per Volare. Fra i beni ci sono, tra l'altro, 64 aeromobili di proprieta' anche gravati di ipoteca, con relativi motori (anche di scorta) di proprieta' dei venditori e i contratti di leasing di 29 aerei, tutti i diritti di atterraggio, decollo, sorvolo e traffico, utilizzati o meno, esclusi quelli del trasporto merci ''All Cargo''.

ANSA, translated by Translate.google.com (unedited): For goods and contracts for Alitalia Cai draws 900 million for Alitalia Servizi 57 million, 7 million for Alitalia Airport, 19 for Alitalia Express and 17 for Volare. Among the assets we have, among other things, 64 aircraft owned 'mortgage also burdened with its engines (including spare) property' sellers and leasing contracts for 29 aircraft, all right landing, takeoff, and overflight traffic, used or not, excluding transportation goods''All Cargo''.


ANSA: Mentre all'Enac procede l'istruttoria economica e tecnica che entro fine mese dovrebbe consentire il rilascio di certificazioni e licenze per il decollo della nuova Alitalia (Cai dovra' gia aver rilevato da Alitalia assett e avere equipaggi, ha detto Riggio), i sindacati hanno ricevuto oggi le lettere sulla procedura di mobilita' e licenziamento collettivo del personale di Alitalia Servizi (3.344 dipendenti), Volare (466) e Alitalia Airport (3.239), dopo quelle di ieri relative ad Alitalia spa (8.429 lavoratori) e Alitalia Express (597). In totale, la procedura riguarda 16.075 unita' e da questo bacino e da quello dei dipendenti di AirOne (per la quale e' possibile una procedura di ristrutturazione di azienda) Cai assumera' i 12.639 dipendenti della Nuova Alitalia.

ANSA, translated by translate.google.com (unedited): While the investigation proceeds all'Enac economic and technical that by the end of this month would allow the issuance of certificates and licenses for the takeoff of the new Alitalia (Cai should 'have already pointed out by Alitalia assets and have crews, said Riggio), trade unions have received the letters on the procedure mobilizes' collective redundancies and staff of Alitalia Services (3,344 employees), Volare (466) and Alitalia Airport (3239), after those of yesterday for Alitalia SpA (8,429 workers) and Alitalia Express ( 597). In total, the procedure covers 16,075 units' and from this basin, or that of employees of AirOne (for which e 'a possible restructuring of company) Cai assume' the 12,639 employees of New Alitalia.


Source:
http://www.ansa.it/opencms/export/site/ ... 14738.html

[tsv]

Anyone have any idea what CAI get (and don't get) for their billion Euros? Sounds like a real generous price to me. Sure they will inherit plenty of aircraft, some valuable slots & lots of staff (of ? value!). But the beast they're buying hasn't turned a profit for many years in reasonable economic times. And the Union issues are hardly resolved. I can only assume the existing debts are to be paid by the government?

Even so are they really going to get a good return on their investment? Especially when taking over at the start of a Global Recession?

I'm sure they've got a small army of experts doing the due diligence on this bid but for an outsider looking in it looks speculative at best - if not reckless.

Does anyone reckon this will work out for CAI? If so how?

[sn26567]

And now British Airways also wants an alliance with the new Alitalia!

Reuters: http://www.reuters.com/article/innovati ... 3W20081107
The Guardian: http://www.guardian.co.uk/business/feedarticle/7994459
Financial Times: http://www.ft.com/cms/s/0/157c7cda-acf4 ... 07658.html
Business Travel World: http://www.businesstravelworld.com/page ... tryID=1284

Meanwhile, Alitalia pilots and flight crew intend to go on strike on 25 November. To sink the company forever?

Reuters: http://www.reuters.com/article/rbssIndu ... 5720081107

[Airbus330lover]

And now British Airways also wants an alliance with the new Alitalia!

It seems to be normal for me...
They were too late for SN and a continental base (MAD only is too short)

[ticketbuyer]

Alitalia pilots have already started a sciopero bianco (white strike) which is what the British call a 'go slow'.
This has resulted in flight delays of up to 2 hours and the police intervening at FCO to control angry passengers-new Alitalia looks very much like the old one.
British Airways share price has fallen so much that it's tie up with Iberia isn't looking so good, perhaps they now think Alitalia would make a better match

[sn26567]

A wildcat strike by Alitalia pilots and flight attendants yesterday compelled the airline to cancel 100 flights, causing chaos at Fiumicino. Go on, guys: when the airline will be bankrupt you'll be on strike forever.

See further details in ANSA news in English without the need for a Google translation: http://www.ansa.it/site/notizie/awnplus ... 91500.html

[regi]

well,
the Alitalia people were not the only ones. The railway workers of Rome joined the airline brothers, about in principal the same problem: re-negotation the labour contracts.
read the last lines of this article:

http://news.bbc.co.uk/2/hi/europe/7721214.stm

[ticketbuyer]

There's a story in this evenings paper saying that LH have suspended talks with SAS to focus on Alitalia and Austrian
http://www.24minuti.ilsole24ore.com/24M ... no/5.shtml

[ticketbuyer]

An Engish version of above story
http://news.airwise.com/story/view/1226394644.html

[LX-LGX]

Hot news :

The European Commission accepts the 300 mio loan and the sale from AZ assetts (if at market conditions).

Source:
http://tinyurl.com/673vbp

[ExSabena]

It's a shame ....

[LX-LGX]

It's a shame ...

(I'm just the messenger)

European Commission : Background note on State aid to the air transport sector

What is the rationale behind state aid control in this sector?

The reason for State aid control is that the air transport sector is liberalised and as such the Commission must ensure that a level playing field exists as between Community air carriers

What are the procedural steps + timeframe?

Cases can arise either from complaints or from notifications. The procedural regulation provides that following receipt of a fully detailed notification the Commission must take a position thereon within two months. If the notification is incomplete then the Commission can request additional information – this suspends the time period. If the Commission decides that it has doubts regarding the compatibility of a measure with the common market it can open a formal investigation procedure inviting the member state concerned and third parties to provide their comments and additional information. Ordinarily, the Commission has 18 months after such an opening of the investigative procedure to conclude its investigation.

What constitutes state aid and what not + different types of aid + examples

State aid is in essence a gratuitous advantage granted from State resources to an economic operator which distorts or could distort competition. What this means is that firstly the State or an emanation thereof should be involved and that there has to be a transfer of resources. State aid can take many forms (e.g. capital increases, debt write-offs, loans, loan guarantees, direct grants, tax breaks, investments, business incentives etc). State aid to a buyer arises when an undertaking arises is sold below market price.

When should state aid be notified?

State aid should always be notified prior to being implemented

What are the particularities in the air transport sector compared to general state aid rules?

In general all of the rules generally applicable to state aid apply also to the air transport sector, these rules include those relating to State aid for the rescue and restructuring of firms in difficulty, training of staff etc. However given the particularities of the air transport sector two specific set of rules have been adopted in 1994 and 2004. The 1994 guidelines relate primarily to the privatisation of flag carriers, the 2005 guidelines provide rules with regard to start-up aid for new routes and the financing of airport infrastructure.

Reference documents / links to them

Procedure rules relating to State aid generally

http://ec.europa.eu/comm/competition/st ... /rules.cfm

Rules specific to State aid to air transport

http://ec.europa.eu/dgs/energy_transpor ... en.htm#air

Links to other State aid decisions

All published State aid decisions are available at the following site

http://ec.europa.eu/comm/competition/st ... gister/ii/

- - -

Source: http://tinyurl.com/5rd5mb

[sn26567]

To say it very briefly:

The EU has given the go ahead for the takeover of Alitalia, but the airline must pay back a 300 million euro loan first.

The European commission also said the loan, originally lent by the Italian government, would not have to be paid by the CAI consortium.

Meanwhile, the wildcat strike by Alitalia aircrew headed into its third day. Dozens of national and international flights have already been cancelled.

[Desert Rat]

there really is a huge difference between the small and big countries in the E.U.....

[euroflyer]

there really is a huge difference between the small and big countries in the E.U.....

Sorry, but I really do not think you are right. There is probably a difference in the ways the different countries (and governments!) do represent their interests on certain items, but I am relatively sure the Commission staff is not making a difference between small and big when deciding. But decisions are of course taken on the basis of the facts provided by the involved companies, the member states (the competitors!) and so on ...

[bits44]

Is it not time for common sense and intelligence to come into play!

The Pilots and Air Crew and their union are going to bring Italy to a standstill, they obviously have no regard for the traveling public, no consideration for other Alitalia employee's and are concerned about one thing and one thing only, and that's greed pure and simple.

The whole Alitalia process should be scrapped, everyone should be fired forthwith and the company allowed to collapse in bankruptcy.

Then and only then can the process begin with everyone re-applying for their jobs, all seniority to begin anew, and everyone signing an agreement to forgo union organizing for a period of two years.

A fresh start, a two year period to get the airline back on it's feet, and a slimmer and trimmer operation overall.


If they can't agree to that then the airline should be allowed to fold, leaving everyone without a job, and no National Airline in Italy.

And you know what, the sun will still come up the day after, life will go on, and some entrepreneur will step in and start a new airline on their terms, somebody like Sir Richard or Michael, perhaps.

[Cartman]

The whole Alitalia process should be scrapped, everyone should be fired forthwith and the company allowed to collapse in bankruptcy.

Then and only then can the process begin with everyone re-applying for their jobs, all seniority to begin anew, and everyone signing an agreement to forgo union organizing for a period of two years.

<Irony on> Aaaah, there we are. Finally someone who understands that all this left-wing worker's rights are total rubbish and that a succesful company can only be run by treating your employers as a good, not as a capital. That's the true entrepreneur spirit that some sectors have applied worldwide in the last few decades and that since a few months finally starts to payoff, despite all the "leftist-government intrusion with tax money to save thousands of overpayed jobs in companies that made huge profits for years" that we saw in the past weeks. <Irony off>

Serious. You can't mean all this. I'm totally against the way that Italy's unions (not only in aviation BTW) act when it comes to defending worker's rights, and the state subsidies for Alitalia are a bit in the grey zone of european legislation. But eventually, the only way to run a succeful company is respecting your employees and concidering them to be part of the capital, equally important than airplanes for example. After all, there isn't a single product or service in the world that spawns spontaniously into the market. Alitalia indeed needs downsizing, fresh money, a new project and a new spirit. But in the end, it will remain an Italian company with all the typical Italian 'flavour'. Love it or hate it, but that's the way the world goes round...