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Alitalia airline: Hypothesis of the sale

alitalia
alitalia

Alitalia airline is being sold off bit by bit, one piece at a time. Steps being taken include what is being called a Plan B, the aviation part, along with other such things as having to work with Parliament. Times are rough, costs are high, and revenue is down. Read more for all the details.

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To close the Alitalia airline dossier, the hypothesis of the sale in pieces (and at different times) of the company to Italia Trasporti Aereo, the public newco created to relaunch the tricolor carrier, has appeared.

First to take place was the sale of the “aviation” branch and the rental of handling and maintenance services. Then comes the last two blocks purchased in the following months with the approval of the European Commission.

This is the “plan B” that has been working for a few days to overcome the objections of the Community Antitrust according to what institutional sources there are as explained to Corriere della Sera.

The “plan B”

The hypothesis is not yet the definitive one, but as of Monday it is on the table of the Minister of Economic Development Stefano Patuanelli who will have to decide and then give a mandate to the commissioner of Alitalia in extraordinary administration, Giuseppe Leogrande.

The public announcement suspended last March because of the pandemic still “hangs” on the company, but the new solution would have a double advantage. On the one hand, it would neutralize the undesirable effects of that ban or any other future public procedure, and on the other hand it would allow the assets of Alitalia to be sold to a single company, ITA in fact, avoiding the stew.

The “aviation” part

According to the technicians – already working on “plan B” – this would be a viable path. The direct sale of the “aviation” branch alone, for example, would fall under national and non-European legislation, thus avoiding the involvement of the Community Antitrust.

This would also have a significant advantage. It would allow the lock down of the airline’s most precious assets (the brand, the flight code, the slots associated with the initials, the MilleMiglia loyalty program) and in the meantime allow the new company to take off. Experts estimate the aviation branch – net of aircraft – is at around 220 million euros.

The other two branches

Alongside the sale of the “aviation” part, extraordinary administration and ITA should sign an agreement for the supply of maintenance and handling services. The newco, in short, would rent the other two branches, while working on the construction of an operation that can be good for Europe.

It is no coincidence – they point out from Brussels – that for several months the Directorate General for Competition of the European Commission has had no objection to the flight part, but explains that it is the other two blocks – handling and maintenance – which must be sold through a public tender.

Times

But times are tight. “Plan B” must take place before the start of the summer season which in air transport starts at the end of March. Alitalia in extraordinary administration is unable to handle the overall sale procedure as established by the tender suspended in March, because it could take up to twelve months. Commissioner Leogrande is waiting for indications from the Italian government on the type of tender in order to proceed with the formal steps.

The monthly costs

The commissioner is in a hurry to close the dossier. On Tuesday afternoon, he explained to the unions that the cash flow is at a minimum, revenues continue to mark at minus 90% due to COVID-19, and expenses remain. Of the 73 million euros in compensation received at the end of the year for the damages suffered by the pandemic, about 18 million were spent on December paychecks and 10 million on the thirteenth, not to mention operating costs (aircraft rental, fuel, insurance, maintenance, etc.).

If the other 77 million does not arrive to compensate the damages of the last two months of 2020, there will be enough money to pay only the salaries of January.

Confrontation with Europe

Meanwhile, a video conference is expected on Friday between the technicians of the EU Antitrust, Italy Air Transport (ITA), and the Ministry of Economy (shareholder of the newco) to begin answering part of the questions sent by the Directorate General for Competition regarding the industrial plan for the start of the business.

Some of the questions, it is pointed out, contain incorrect information and are, therefore, easily solved, while others go into more detail and will need several days not only to answer but also to prevent such sensitive information from ending up in the hands of the competition.

In Parliament

On the Italian front, the examination of the ITA industrial plan in the Public Works Committee of the Senate with the report by Giulia Lupo (M5S) began on Tuesday, January 12. The committees of the Senate and the House will have to express an opinion within 30 days on the business plan. The works thus began the day after the informal (and strictly confidential) hearing of the newco’s top management, the President Francesco Caio, and the CEO and General Manager Fabio Lazzerini. New hearings are also scheduled for next week.

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About the author

Mario Masciullo - eTN Italy

Mario is a veteran in the travel industry.
His experience extends worldwide since 1960 when at the age of 21 he started exploring Japan, Hong Kong, and Thailand.
Mario has seen the World Tourism develop up to date and witnessed the
destruction of the root/testimony of the past of a good number of countries in favor of modernity/progress.
During the last 20 years Mario's travel experience has concentrated in South East Asia and of late included the Indian Sub Continent.

Part of Mario's work experience includes multi activities in the Civil Aviation
field concluded after organizing the kik off of for Malaysia Singapore Airlines in Italy as an Institutor and continued for 16 years in the role of Sales /Marketing Manager Italy for Singapore Airlines after the split of the two governments in October 1972.

Mario's official Journalist license is by the "National Order of Journalists Rome, Italy in 1977.