Alitalia Reboots As ITA (Italia Trasporto Aereo)

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There has been news from Italy over the past month about the third reboot in the past 10+ years of the country’s flagship airline – Alitalia.

The country has already spent more than 10 billion euros in the previous bankruptcies and will throw in another three to get ITAItalia Trasporto Aereo off the ground. The Alitalia name is supposedly retired, and the membership in the SkyTeam is uncertain.

You can access Alitalia here.

Here’s an excerpt from Il Messaggero:

For now it is called Italy Air Transport ( ITA ) and part under the control of the State, but it will open the share capital “to institutional, financial and industrial investors”. When Newco buys planes and employees, it will also be able to take over the Alitalia brand and be called Alitalia ITA. The new company, which will have an initial capital of 20 million and will reach 3 billion within a few weeks, “is authorized to purchase and rent, also by direct negotiation, company branches of companies holding airline licenses issued by ‘ Enac, even in extraordinary administration ». It could therefore save Air Italy. And «it will be able to develop synergies and alliances with other Italian and non-Italian public and private entities». It can be divided into subsidiaries in maintenance and services.

Conclusion

You would think that the Italian government would have learned by now that they are not very good at trying to run an airline? You could understand trying to reboot it once but now for the third time?

The government is already “fighting” with the EU regarding the previous reboot and loans extended to the airline. States in Europe are not supposed to prop up failing businesses distorting competition.

Ryanair, EasyJet, and Wizz now all operate domestic routes within Italy, and undoubtedly their cost base is lower than that of Alitalia or ITA. A high-speed rail is also a viable option between population centers within the country.

Air Italy, the former Meridiana that partnered with Qatar Airways, ended its operations this spring. The owners decided that there was no way to turn the business around despite their lofty medium/long-term goal of forming a new global airline.

I am sure that nobody would like to see a well-established airline to collapse, I am no different, but at some point, you have to conclude that there is no business case to keep throwing billion+ euros every year to keep the “flagship” airline flying that most Italians don’t use.

It isn’t easy to see Alitalia or ITA (Italia Trasporto Aereo) return to profitability. I am sure that the newco is happy to burn the 3 billion euros, but what in max three years?

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