Alitalia Running Out Of Cash By The End Of March, 2017

by -
8 Comments

Alitalia had a strike last week when the crew members weren’t too eager as a concession to have fewer vacation days and having to stock up lavatories during long-haul flights.

Alitalia Running Out Of Cash

Now, Il Sole 24 is reporting that the airline will run out of cash by the end of March unless someone is willing to lend some more or the airline can find new equity investors. The airline is expected to lose 600 million euros this year.

You can access the Il Sole article here of which below is an excerpt:

They nearly halted activities just before Christmas, when the ailing company – which is 49% owned by the UAE’s Etihad Airways – already had a negative balance. They avoided the collapse on December 22nd when the shareholder banks on the board, UniCredit and Intesa Sanpaolo, released the lines of credit that were already granted, worth €180

For a few years now, Ryanair has been transporting more passengers in Italy than Alitalia: 2015’s figures show 29.7 million passengers, versus 22.987 million. And it won’t be long before easyJet could also surpass them, with 14.36 million passengers in 2015.

2017 should have been the year for them to break even in terms of operating and net profits, according to the plan launched in August 2014 by their new, strong partner Etihad. In the first two years since Etihad joined (2015 and 2016), the “new” company had over €1 billion in operating losses.

Conclusion

It is interesting to see who is going to “refinance” the airline by the end of March or whether it finally fold down. Seems that they are running out of options. Etihad cannot raise their share (already own the maximum 49%) and why would they? Not sure why Italian banks have become shareholders of this loss making airline and keep extending the loans?

I would be hesitant to make booking on Alitalia operated flights past the end of March. If you do, make sure that you pay using a credit card.

I truly wish that the airline can survive, but they must come up with something that won’t keep burning 1 – 2 million euros per day as they currently do.

If you enjoyed this article, get our blog updates for free!

YOU MIGHT ALSO LIKE

  • Gaijinsan

    Certainly some European airlines have been allowed to fold and essentially re-emerge as a more efficient airline. Swiss and Brussels are 2 good examples. I think Alitalia is very long overdue, they have been in danger of collapse at least once a year for as long as I’ve been flying internationally, most likely longer. Let them go down as a whole, let Etihad bite most of the loss, and create a so-called “new” Italian International Airlines for pennies on the dollar buying up the worthwhile scraps with no unions and no legacy contracts.

    • Austrian too. It was Austrian Arrows that operated the flights for a while and everyone had to reapply.

  • colin

    I don’t think even the Italian government can help with funding ?

    I seem to remember the Greece national Olympic Arline being forced to close by European Parliament’s unfair support rules regarding stated aid given mutiple times to Olympic

    I guess Alitalia needs to fold too

    • Government can give infusion only one time and at market rate. Wasn’t the Italian post office that invested to the airline on previous rounds?

    • BenniHK

      The one been forced to close was neither Greek national carrier, nor Olympic air (which still alive and was merged with aegean under proper negotiations).
      I guess u r talking about Cyprus airways. All operations were taken by aegean (they were very closely related before the closure seems), and now no national carrier for Cyprus (neither northern nor southern) at the moment.

  • Mike

    James Hogan decided this would be a good investment for Etihad?! Finally, blunder after blunder, he is being removed. He should never be allowed in the airline industry!

    • Holiday_Hero

      I think it was a routes option decision. And Abu Dhabi has plenty of oil money to waste. They possibly want it to fail.

    • I believe that Etihad wanted to invest these various airlines that in return would feed their hub in Abu Dhabi. I believe that the UAE airlines have maxed their frequencies to countries such as Germany.