Long-troubled Alitalia is up for sale, with a fall deadline for either a qualified buyer or a sell-off of assets and liquidation. A number of potential buyers are looking at the numbers, but there’s no guarantee of a deal.
The special commissioners appointed by the Italian government, with six-month government financing to allow for an orderly process, were unable to come up with a viable plant. Previous attempts at ‘rescue’ plans failed, rejected either by banks and buyers, or by the airline’s staff, who turned down the ‘last’ deal in the spring over the level of staff, salary and benefit cuts it involved.
The list of bidders, or how many, has not been officially revealed, but press sources suggest there are about 18 or so who will submit non-binding proposals by July 21. A number of those will then be invited to make a final, binding bid in October. If no deal is possible at that point, the airline will close down and its assets will be sold.
Etihad Airlines, which owns 49% of the line and was seen as a savior in 2014, might possibly be interested in taking majority control, now that non-Italian bidders are allowed to pass the 50% mark, but it has been having financial issues of its own recently.
Luftfhansa has been a long-rumored possibility, with the experience of absorbing other national airlines, including Austrian, Swiss and Brussels, but it is a Star Alliance leader, while Alitalia is part of not only SkyTeam, but also a joint-venture partner on Atlantic routes with fellow SkyTeam members Delta, AirFrance/KLM and VirginAtlantic, an arrangement that might be costly to unwind. As well, labor costs have been an issue for Alitalia, and Lufthansa’s just gone with several years of turmoil on that with its own staff.
Alitalia’s long-distance routes in addition to the Atlantic might tempt AirFrance/KLM into a strong bid, possibly with Delta as a junior partner. Because of European rules, Delta could not be the majority buyer, but it is one of the airlines qualified as a bidder. During a previous financial crisis in 2008, AirFrance/KLM offered to buy the airline.
And, coming up on the outside, are two discount airlines that have qualified to bid, Ryanair and EasyJet. Neither has any experience as a long-haul operator, although Ryanair has always dreamed of trans-Atlantic routes. Ryanair already flies more passengers within Italy than Alitalia; it’s possible that one of the discounters might want to buy Alitalia’s short-haul intra-European routes while letting the long-haul routes go to another bidder.
From the website:”Alitalia reiterates that the current situation doesn’t have and will not have any impact on its current or future flight schedule. All services are operating as normal. The purchase of new tickets can be done as always through Alitalia.com website, Alitalia’s contact center or travel agencies.” I’ll pretend I feel better.
In a way it’s as if they are pretending to feel better.
On the other hand, you can probably breathe comfortably, since the airline will still be flying until it’s either sold (and final bids are not due until October) or closed (which won’t happen unless none of the October bids are satisfactory).
In the meantime, it’s operating on a €600 million bridge loan from the Italian government, voted in early May. That loan will will last until nearly the end of the year, and Italian papers are betting that if there’s no sale, it will be extended at least until the election early next year.
In any case, then, it appears that nothing will change by the time you’re due for your boarding pass.
Where are you going?
Uh oh, I have 2 Alitalia flights booked for November. It’ll be interesting to see what happens.
Rome & Egypt. Been postponing the latter since the early ’70s and you know how it goes, if not now, when?