Alitalia On Verge Of Bankruptcy AGAIN?

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Alitalia was on verge of bankruptcy last time in 2009. Italian investors and Air France-KLM came to the rescue.

Now, the airline has amassed losses of more than billion Euros in four years time and is again on verge of bankruptcy unless emergency capital injection of hundreds of million Euros in the next few days.

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Apparently, the company is behind in payments and is afraid of suppliers stopping delivery of fuel or only doing it in cash basis. You can read more about this on Reuters website here and on BusinessWeek website here.

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The government of Italy has asked the Italian train operator to invest into Alitalia. Air France-KLM Group has also considered upping their 25% stake, but the Alitalia employee union is against this due to possible losses in employment and becoming more of a feeder airline.

Conclusion

The Alitalia has been a mess for years. The European Union prevents governments pumping money to loss making airlines that would distort the competitions and thus they (the Italian government) need to find an outside investor or investors.

Why anybody would invest into an airline that has accrued losses of more than billion Euros in four years time and would not be willing to cut costs or change operations, is entirely different matter?

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