Alitalia has been in bankruptcy now for two years and may see another “reset” next week when, according to Italian media sources, the local railway operator and Italian government will take a 50% stake in the newly formed company (and the bad debt is left to the tax payers).
The rest of the company would go to other Italian entities and Delta Air Lines may chip in for a small stake. This is now an “umpteenth” time the airline is being rescued with tax payers’ help.
Here’s an excerpt from L’Economia (access their piece here):
The government tries to close the game on Alitalia. The scheme is a veiled nationalization of the former flag company, focusing on the establishment of a new company where the majority of the capital will be in public hands. In practice, the process of re-launching the carrier, currently in the commissioning procedure, will have to be Ferrovie dello Stato, with a 35% stake, and the Ministry of Economy, through a 15% stake.
The certainty of the commitment of Delta Airlines , which will subscribe a 10% stake, is offset by the uncertainty on the other shareholders who receive the remaining 40% of shares. A missing quota worth at least 300 million euros in terms of recapitalization.
Italian government or government owned entities controlling more than half of the company does not bode well for its future success. Why would Italian railways take 35% stake in the “new” Alitalia unless forced by the government?
The airline has lost billions since early 2000’s and this is fifth or sixth restart since the 1999. Sometimes it would be wise for allowing failing business to simply collapse. Now, Italian tax payers are picking up the tab yet again.
When are we going to see the next restart? In two years time?