Italian Government Steps in to Save Alitalia

Company A-ICE
Date 07.04.2020

The Italian Government has announced its plan to rescue Alitalia (Societá Aerea Italiana), the airline flag carrier of Italy. Operating at a loss from its main hub at Leonardo da Vinci-Fiumicino Airport in Rome for more than 11 years, the airline formally comes under the control of the Italian Government this month.

Building a new airline

Since the government-approved move into administration in 2017, loss-making Alitalia has continued to decline at the same rate. The coronavirus outbreak and subsequent pandemic, which has hit Italy the hardest so far, has been enough to bring Alitalia’s situation to a head and it was confirmed on 17th March 2020 that the restructure of the airline would now fall to the government.

The plans for Alitalia are not yet fully confirmed and it is not clear what will happen to the airline’s current 11,000-member workforce, but sources said that the airline will operate with a reduced fleet of around 25-30 aircraft. This is approximately 25% of the current fleet, which are running at around 100 flights per day during the current crisis.

A detailed business plan needed

CGIL and FILT union representatives have asked for a detailed business plan, including outlined plans for the protection of jobs once the airline, which in 2018 was the 12th largest airline in Europe, is under full state control. A joint separate statement from both unions said, ‘Even if we acknowledge the serious crisis that the country is experiencing, the new Alitalia should be created with the idea of developing it and increasing its flights once the emergency is over.’

The Italian government has promised €500 million for the airlines industry across Italy and it is thought that much of this fund will be used to nationalise Alitalia. The move is welcomed by industry professionals, who after watching the demise of the airline over the past decade, feel that this demonstrates real confidence from the government that Alitalia has a future once the coronavirus pandemic is over, especially over some of its rivals that have enjoyed better funding.

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