Alitalia crisis

Digging the Grave

Born in 1947 and 60 years after the first International flight (it was Rome-Oslo), Alitalia is facing the worst crisis in its life: it seems that Italy will have no more national flight company


By MARCO RICIPUTI
from Ravenna, ITALY


Since 2004 there is a debate in Italy about the future of Alitalia. The reasons that put Alitalia in the corner are well known: high salaries, low productivity, the role of 'national champion' protected by the State in the framework of growing low cost companies.

The company is on sell since 2006. The Italian state did many attempts to privatize it with no success. At least, one must recognize that Alitalia is in part private also today but is controlled always by the state. Why should someone buy the Italian national flight company?

2008 no more cash

The precarious condition of Alitalia lead in the 2008 in the worst scenario: the ghost of lack of cash for the salary, the fuel and the creditors. Over the past twenty years, Alitalia has closed in nineteen years with a loss in profit. In 2007 he lost a million per day in 2006 were even two.

From August onwards things have deteriorated rapidly. The company is "burning" the liqidity at a rate of almost three million a day. The liquidity that Alitalia has available in the short period stood at around 600 million Euros in July 2007, almost halved in December (367 million available), then dropped to 280 in January 2008, 180 in February and 90 in March.

But the situation is even worse if one considers that beside the availability of "gross", there is also a short-debt of 140 million, the net availability was already virtually zero at the end of March. The rate of fall of liquidity is about 100 million per month. Without the loan of the state of 300 million, Alitalia would have been the money to pay salaries for May? Probably not.

Alitalia has now a deteriorate 'brand name': it has accumulated more than 1.7 billion debt, continues to lose hundreds of millions of euro a year (for ten years, not since yesterday) along with shares of market - national, international and intercontinental -, has a fleet of the most diverse and older in Europe. No surprise if 15 months gone with no real offers but only the Air France one with no consequences.

'The Italians flight with Alitalia' False

Those are the consequences of a policy (national and local) blind and rapacious, quarrelsome trade unions, an inept management. Politicians wish to save Alitalia in name of the national pride. 'Italy is a great country and a great country must have a national air company' say the government while the trade unions stress the high skills of the pilots and workers who risk to the job in case of sale. Some say that without Alitalia Italians can't flight. But most of the people already chosen the 'low cost way' and even the business slots will cost less with no monopoly.

Alitalia has for years been unable to intercept the demand for flights to emerge from Italy. For years the number of passengers remains at around 25 million, while the number of flights operated by the Italians literally explodes: from 42 million in 2000 to 82 million passengers in 2007, with carriers such as Ryan Air, Easy Jet and so forth.

It is wrong to say that without Alitalia Italians do not fly: now only a minority of citizens who want to fly is aimed at Alitalia. The airline is only a small proportion of flights in Italy, but the rest of the market it good or bad to make profits, Alitalia continues to lose. As much honestly, the Alitalia Management Board admit that the number of passengers is constantly decreasing.

'Better failed' waiting the gravedigger

The last weeks were dramatic for the company. Technically Alitalia is failed even if politicians and trade unionist still fight on the corpse of the company, discussing the role of the national air company (which one?) and evoking magical solutions. The special commissioner Fantozzi - the same name of a famous Italian comedian - has published advertisements on the major newspapers - yes, newspaper - where ask if someone is interested in buying Alitalia.

So, in this surreal situation the employees strike singing 'better failed that saved' while everyone is waiting the gravedigger.


(Published: 10.10.2008.)