Alitalia dies after 75 turbulent years, hands over to ITA

Alitalia dies after 75 turbulent years, hands over to ITA

Stock Markets9 minutes ago (Oct 14, 2021 01:21PM ET)

(C) Reuters. FILE PHOTO: Alitalia planes are seen on the tarmac at Fiumicino International Airport as talks between Italy and the European Commission over the revamp of Alitalia are due to enter a key phase, in Rome, Italy, April 15, 2021. REUTERS/Remo Casilli

By Francesca Landini

MILAN (Reuters) – Alitalia, a one-time symbol of Italian style and glamour brought low by economic mismanagement, will operate its last flight on Thursday after 75 years, before handing over to its downsized successor Italia Trasporto Aereo (ITA).

The traditional choice of popes, prima donnas and Italy’s political elite, Alitalia has been run by state-appointed administrators since 2017 to avoid being liquidated.

A night flight from Sardinia’s capital Cagliari due to land in Rome at around 2100 GMT will mark the final bow for the airline founded in 1946, after a dizzying succession of restructurings and changes of ownership.

The company has ended only one year in the black this century and the government has run to its rescue many times, spending more than 8 billion euros ($9.27 billion) just in the last three years.

As has often been the case during its lifetime, Alitalia’s last rites were surrounded by political dispute, with the far-right opposition party Brothers of Italy blaming Prime Minister Mario Draghi’s government for its demise.

“Today we are losing another jewel, a company that has forged the history of our nation and … made us proud to be Italian,” said the party leader Giorgia Meloni.

After seeking to sell Alitalia to private investors, in 2020 Rome surrendered to the disastrous consequences of the pandemic for the airline sector and decided to create ITA from its ashes.

The new carrier, in which the government will invest 1.35 billion euros over three years, will start with 52 jets and 2,800 employees, compared with around 110 aircraft and a workforce of 10,000 for Alitalia.

Under a deal negotiated with the European Commission, there must be clear discontinuity between Alitalia and its successor, and the new carrier needs to be profitable by the end of its 2021-2025 business plan.

However, Alitalia’s legacy of high costs, mismanagement and heavy political and trade union influence may be hard for ITA to shrug off.

The new carrier is in talks to buy Alitalia’s brand and is expected to maintain the traditional green-white-red livery.

The launch of a nimbler carrier leaves a question mark over the future of more than 7,000 Alitalia workers who will be put under a temporary lay-off scheme paid for by the government until at least Sept. 2022.

($1 = 0.8630 euros)

Alitalia dies after 75 turbulent years, hands over to ITA

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