Union strikes and shambolic negotiations: Alitalia still kicking
Two years after Alitalia declared bankruptcy and various deadlines extended, the Italian government is still negotiating a binding proposal with potential investors, including U.S. carrier Delta. The protracted talks over the rescue of the ailing national airline seem to be reaching the boiling point both among the partners working on a turnaround plan for Alitalia and the carrier’s employees. To express their frustration over the continuing uncertainty, Alitalia’s staff are planning a strike that is expected to result in hundreds of flights to and from Italy being cancelled on October 9, 2019. What could be the last straw to break the camel’s back?
State railway company Ferrovie dello Stato, infrastructure group Atlantia and U.S. giant Delta Air Lines are the only three players left in the game working on the possible relaunch of Alitalia together with Italy’s Ministry of Economic Development. Previously rumored suitors, including British low-costs EasyJet and Ryanair, Germany’s Lufthansa, Hungary’s Wizz Air and Air France-KLM, have all dropped their interest in the Italian carrier.
As the Italian government continues to negotiate a rescue plan for Alitalia, the deadline for the consortium to come up with a joint deal, led by Ferrovie, has once again been pushed back – currently to October 15, 2019. Since the parties were not able to agree on a binding offer for the previous deadline of September 15, 2019, the one-month extension is not raising high hopes.
The main issue that the Italian parties seem to be struggling with is Delta’s commitment. The Italian Prime Minister Giuseppe Conte has put pressure on the U.S. carrier to consider increasing its planned investment in Alitalia’s turnaround. So far, Delta has pledged to take a stake of 10% for $100 million, which Conte says “seems a bit low to have a strong business involvement,” Reuters reports. It is estimated that the bid for Alitalia could be worth around €1 billion.
Another sticking point is the development of Alitalia’s highly-profitable routes in North America, which the Italian parties view as instrumental in reviving the carrier and want to see expanded. According to sources cited in a separate report by Reuters, Italian partners are questioning the role that Alitalia would play in the proposed “Blue Skies” transatlantic joint venture with Delta, Air France-KLM and Virgin Atlantic as it may lead to Alitalia having to share revenues from the North American routes with Delta and the two other partners of the alliance. Alitalia is already a member of SkyTeam, as is Delta, Air France KLM and Virgin Atlantic.
Stirring the pot is Atlantia, expected to take around 35% stake in the revived airline. The company has asked the country’s Ministry of Economic Development to radically revise the rescue plan for Alitalia if negotiations are to go on, expressing its dissatisfaction with the multiple delays and unclear terms in the current plan, Italian news agency Adnkronos writes. Further complicating matters is the fallout of a road bridge collapse in Genoa in August 2018, operated by Atlantia’s motorway unit. The company has threatened to withdraw from rescue talks if the Italian government continues to revoke motorway concessions, IlPost.it reports.
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