Watching An Airline Die A Slow Death : Alitalia’s Almost Certain Failure

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22/09/2008 – Watching An Airline Die A Slow Death : Alitalia’s Almost Certain Failure

I have been following what I believed to be Alitalia’s almost certain demise for nearly a year, if not longer. Alitalia has only posted a single profitable year since 1998, even with a €1.5bil cash infusion from the Italian Government in 1998, and has sustained losses of more than €3.7bil between 2000-&-2008.

Watching an airline continue to fail so massively is made more difficult when you also watch the airline’s Unions maintaining an unwavering stance to allow no concessions in the face of an airline that is shedding approximately €1mil (US$1.4mil) per day.

The Unions’ stance initially caused me to step back and wonder what the Unions knew, until the last few months. Over the past 7 or 8 months it became blatantly apparent that the Unions were not making an educated decision. The Unions have merely been sticking their heads in the ground.

Alitalia for years has lagged behind other European ‘Flag Carriers’ in terms of on-time performance, in-flight amenities (an example is the airline still not offering in-seat electrical power in their business class cabin on their long haul fleet), and has continued to operate out of a ‘hub airport’ that can only be described as ‘chaos.’

Many international airlines operate out of complex airports, some of these airports aren’t always up to the standards an airline would like. Rome’s Leonardo da Vinci-Fiumicino Airport (FCO) however operates at a level of chaos that would best be described as ‘pure chaos’ on a good day.

The baggage situation alone at FCO appears to be unrivaled in terms of delays, lost baggage and a total inability to manage an airport’s basic operations effectively. The baggage operations at FCO, which are largely run by Alitalia, was so out of control at one point that nearly 100,000 pieces of baggage were lost or mid-sorted in a single weekend during the summer of 2007.

Alitalia’s ‘hub airport’ has even been referred to as a ‘National Disgrace’ by members of the Parlamento Italiano

In the last week Alitalia’s Unions have refused a €1bil (US$1.4bil) bailout/buy out by CAI, an Italian company who owns AirOne. In the face of total collapse, the Unions refused the offers and eventually CAI removed their offer from the table.

Today Alitalia is continuing to have some problems getting fuel to their aircraft. The fuel delivery trucks are running, but fuel delivery companies are requiring guaranteed funds before fueling Alitalia’s aircraft.

………so where does this leave Alitalia? After 62 years of being Italy’s National Flag Carrier it appears that Altero Matteoli, Italy’s Transportation Minister, is beginning the process of rescinding Alitalia’s license to operate as a commercial airline.

It is highly likely that my year of watching the slow painful death of Alitalia will come to an end by the end of this week.

Is this how it ends : Alitalia 1946-2008?

Happy Flying!