It looks like Berlusconi is trying to organize either a purchase or bail-out with a group of entrepreneurs. Here's an article LINK
I have tickets on Alitalia from Los Angeles to Rome in September. I called their customer service last night. I was told that, as a worst case scenario, if Alitalia goes under, I would be booked on one of their partner airlines (Delta, Air France, etc.). I'm sure that I can take this to the bank. Canceling the ticket outright is not an option as it is non-refundable.
There is also the possibility that Alitalia will not "go under", but that the nonstop LAX/FCO flight will be cancelled. If that happens, you might be put on Delta to JFK.
Originally posted by CaWino: Delta now has a non-stop for LAX to Rome.
THIS IS THE ALITALIA OPERATED FLIGHT, using a Delta code share number!!!!!!!!!!!!!!!
If Alitalia runs out of money, they won't be able to "fill the tank" with aviation fuel (nor pay landing fees at LAX), and the flight could be cancelled. And Delta won't "fill the tank" on Alitalia's behalf, either.
P.S.: There are still PLENTY of open seats for the inaugural flight to FCO on June 1st!!!
The Italian government has just loaned Alitalia 300 million Euro - it says it did so at market rates to comply with EU regulations.
Whatever rate Alitalia is losing money at - some say 1 million Euro a day, some say 3 million - 300 million should let them pay fuel costs and landing rights well past June 1. Whether it's worth their while to fly the plane half empty is another question.
I've been following the Alitalia saga, chiefly in the Italian media.
Most articles I've seen - in La Repubblica, for example - have said that Alitalia is losing money at the rate of 1 million Euro a day; recently I saw an article - I don't remember in which online newspaper - that put it at 3 million a day. Maybe it was a misprint or a mistake.
I am sure someone will disagree with me, but the best flight and best customer service I have ever had was with AirFrance. I was delighted when I heard that they wanted to buy Alitalia (which by the way was the WORST flight and WORST customer service I have ever had). It seems the buyout with KLM has worked just fine and, for the first time in years, "KLM" is showing a profit. Sigh.
Last I heard Berlusconi was in talks to do something regarding Russia buying Alitalia. Has that talk come to stop?
Air France and KLM backed up the moment they were proposed a equal partnership.
AirFrance first idea was to dismantle Malpensa airport in favor of the already congestioned CDG.
The problem is that the Italian gov has spent gazillions of € to build and promote Malpensa, and thousandth of people has invested in that, so the gov has to answer to that.
The impression is that Air France was trying to just destroy instead of rebuild.
Berlusconi has also ipotized a collaboration between Aeroflot, Air France and private investors.
Air France and KLM backed up the moment they were proposed a equal partnership
The problem is that the Italian gov has spent gazillions of € to build and promote Malpensa, and thousandth of people has invested in that, so the gov has to answer to that.
The impression is that Air France was trying to just destroy instead of rebuild.
Yeah I can see why this would not be popular. Unfortunately there is the "golden rule" in business: He that has the gold gets to make the rules. All the Italian government did was subsidize Alitalia to a less negative number in the present. In order to get KLM's gold and take Alitalia to a zero number in the present, one has to let KLM call the shots, or they take their marbles and go home (which is what they did).
Businesses all the time send gazillions on capital equipment, and then have to write it off, abandon it/impair it because the profit margins in the real world (years after the equipment/facility is built and the money is spent) don't make it a profitable venture when the future becomes the present. It's just a cost of doing business by taking a risk that it MIGHT be profitable in the future.
Posts: 3597 | Location: St Paul, MN | Registered: 10 February 2006
Italy has to try to keep Alitalia afloat (aloft?) for a while longer in order to explore a different deal, now that the Air France/KLM proposal has been pulled, even though its loan may contravene EU regulations. The final outcome of an EU legal challenge will take a whole lot longer than Alitalia would have lasted without the loan.
This is SO MUCH bigger than just Alitalia. Many airlines are losing money because of fuel cost and the economy. There will probably be a great deal of consolodation or bancrupt corp. until these businesses become healthy. I just hope that these companies have a healthy respect for the traveler.
Originally posted by Zerlina: I've been following the Alitalia saga, chiefly in the Italian media.
Most articles I've seen - in La Repubblica, for example - have said that Alitalia is losing money at the rate of 1 million Euro a day; recently I saw an article - I don't remember in which online newspaper - that put it at 3 million a day. Maybe it was a misprint or a mistake.
Well considering two of the larger US airlines just announced losses greater then $300 million for a quarter [three month period] it sounds like Alitalia is doing better then average
Originally posted by Alessandra Federici: Air France and KLM backed up the moment they were proposed a equal partnership. that Air France was trying to just destroy instead of rebuild.
I'm surprised they didn't drop the offer the moment Berlusconi opened his mouth weeks ago. The main thing Air France gained from any purchase would be stopping somebody else from going into the market. But with nobody serious looking at Alitalia that wasn't much of a gain. Why not wait until it's shut down and then move in?
You can be sure the first group to file a complaint with the EU was Air France.
If they come back you can be sure the total job losses will be similar. They might be in Rome instead of Milan but the losses won't be much different. Oh maybe they'll drop the bid price.
Quite apart from the emergency "loan" of 300 million Euros (but how will Alitalia find the money to pay it back, in the absence of a "white knight": this sounds like an "evergreen" loan and therefore an illigal subsidy under EEC Law!!!), extended by the outgoing center-left government in order to "preserve public order" (i.e. avoid violent strikes at Malpensa and Fiumicino airports which would have required police intervention), the fact remains that Alitalia (according to a report in today's Corriere della Sera) will be "mothbolling" 37 aircraft this year (of which 3 767-300s used on now-discontinued intercontinental routes to India and China).
The emergency "loan" (handout) was essential to allow Alitalia to avoid having to pay cash upfront to its creditors, and to stave off a threat by ENAC (the Italian Civil Aviation Authority) to yank Alitalia's license to operate.
But, sooner or later, the Italian government won't be able to continue rolling over loan after loan after loan. The EEC will begin to levy fines, and the Italian taxpayers will revolt at the idea of having to pay fines to continue making illegal loans to keep a failed airline afloat.
In today's airline economy, it is impossible for a carrier like Alitalia to survive without a financially strong majority owner. The airline is too small to compete with BA, AF and LH, and too inefficient to compete with the larger low-cost carriers like Ryanair. Alitalia could, however, become a very efficient subsidiary of a larger carrier such as LH (or even AF) if it could get its cost structure under control, tame its unions, and eliminate all the politically motivated bad management decisions. The trick is how to do this (as KLM seems to have done quite well even though it is now a subsidiary of AF) without becoming a pure vassal of the majority owner, and simply providing "feeder" flights to a foreign airport hub such as CDG or FRA. Certainly, there is sufficient demand for direct flights into MXP and/or FCO to allow Alitalia to remain a significant player in the intercontinental market (just think of the strong demand for direct flights to North and South America and to Asia). But none of this is possible without first getting Alitalia's cost structure under control.
According to todays (April 24) print edition of the Wall Street Journal (p. B7) :
"Meanwhile, Alitalia is eating through about Euro 3 million of its cash reserves a day. As of last month, the company had about Euro 170 millions of cash and short-term credit available. The bridge loan, if completed, could buy Alitalia about 100 days more to devise a plan."
Posts: 354 | Location: La Canada, California | Registered: 08 July 2004
Berlusconi helped convinced the unions to take a hardline against AF, didn't he?
All the while promising a bid to keep it in Italian hands?
I heard having both FCO and MXP hubs was a part of its cost problems. They have to apparently fly many employees from Rome to Milan every day to keep the latter operating.
Posts: 54 | Location: West Coast | Registered: 17 April 2008
Originally posted by Cyndi Rae: Alitalia (which by the way was the WORST flight and WORST customer service I have ever had). Cyn
Spot on. The truth is that Alitalia has always been a fun fair for arrogant, good-at-nothing, relative-to-someone, Rayban wearing Romans. In some Roman circles it must be that sporting a “I’m a hostess at Alitalia” opens a lot of doors, or raises a few “wows” so a whole lot of people seem to appreciated the social value of their profession (profession?) more than committing themselves to their service. Just as an example, one day I was left grounded because my flight was cancelled. It was the night of Italy-Ukraine at the soccer world championship two years ago. The crew called themselves ill.
If I were foreigner, and if I were Italian (as I happen to be) I’d rather fly with Eskimo Kites than Alitalia. Let the t**ts sink.
Canceling the ticket outright is not an option as it is non-refundable.
