Alitalia expected to post profit for 1st time since March 2017
Alitalia is expected to close the third quarter of the current financial year with a positive net profit of €2 million ($2.31 million), which would be the first profit the struggling carrier has posted since March 2017, when it declared bankruptcy and entered into special administration.
"The third quarter, ending shortly, is the first in which Alitalia should close with a very small quarterly profit. This has not happened for a long time," said Luigi Gubitosi, one of the three commissioners managing the administration of the flag carrier of Italy.
The positive result is attributable to a combination of factors such as the increase in revenues and the reduction of costs, despite the fact that the price of oil and jet fuel has risen. In addition, during the first two quarters, the number of passengers carried increased between 6% and 7%, added Gubitosi.
In the first nine months of 2018, the airline transported 16.4 million passengers, an increase of 0.4% over the same period last year, with a load factor of over 80%, which is similar to the low-cost sector in Europe, noted Stefano Paleari, one of the other commissioners.
This allowed Alitalia to maintain a total of €770 million ($888.35 million) in cash flow, in good position to pay back – at the time of the eventual sale of the company – the loan extended to the carrier by the Italian government last year, for an amount of €900 million ($1.04 billion).
In an interview for the local newspaper 24 ore, Italy’s vice minister of economic development, Dario Galli, predicted two future scenarios for the airline: on the one hand, a possible partnership with a large company that does not dismantle Alitalia but keeps it in the market and maintains it’s "Italianness".
On the other hand, Galli does not think Alitalia should be sold and the government must be very cautious about proceeding with the sale. "From the industry’s point of view, it is not a first class company but it holds the market, the slots, the airport facilities and the know-how, which is very important, and whoever bids for it must know this well, so we must be careful not to sell it off as we have done in other cases," the vice minister emphasized.
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