Looking for a couple of aging 767s? Maybe some primo counter space at Italy's two largest airports? You might be in luck. It looks like the long ailing Alitalia may have finally reached the end of the runway.
Alitalia has been losing buckets of money for years, and has been in bankruptcy since August, but liquidation now seems imminent for Italy's flag carrier. The airline is losing two billion million euros a day, and now that a group of investors has withdrawn its bid to buy the airline, it has enough cash for only a few more days of fuel. You know how that goes: if you can't buy fuel, you can't fly airplanes.
Alitalia is a case study in how crappy management, short-sighted unions, and self serving politicians can work in unison to sink a major company. Here's how it's done: First, run the airline in such a way that it won't make money. Bring in a new management team that proposes (sensibly) big cuts in Alitalia's bloated employee ranks. Watch unions bare their collective teeth by threatening strikes and leaning on politicians, until the government writes Alitalia a big check to keep things going without job cuts. Repeat annually for 20 years.
It worked for decades, but the times are changing. The European airline market has become much more competitive. The sputtering Italian economy isn't filling the government's coffers the way it used to, and the European Union is more aggressive in investigating cases of illegal state aid. No more government loans, no more cushy monopoly on domestic routes. Suddenly, the airline has to operate like a real business.
The demise of Alitalia is depressing, because for years it was the pride of Italy, despite its complete inability to turn a profit. In some ways, it's a cool airline. Their paint scheme isn't bad. The food is pretty good. The flight attendants are sexy without all the attitude you find over at
Air France. And no airline has a more high-profile celebrity spokesperson: His Holiness the Pope travels in a chartered Alitalia 767.
So what's next? Options are limited. The government is searching desperately and unsuccessfully for someone to step in and buy the airline (interested?). "I have personally contacted the chairmen of Air France, Lufthansa and British
Airways," the airline's bankruptcy administrator told an Italian newspaper. "And they declined the invitation to make an offer." No surprise considering that Italy's completely incompetent Prime Minister Silvio Berlusconi shot down a bid from Air France-KLM earlier this year.
Maurizio Sacconi, Italy's finance manager, says that the situation is grim. "There is no alternative to CAI," he says of the Italian investor group that recently dropped its bid. "We need them to return to the negotiating table because there is a no one else in the race."
No one knows exactly how many days Alitalia has left, and the airline isn't telling, releasing an official comunicato stampa that says only:
We're not exactly sure what that means. But it doesn't sound promising.
Photo by Flickr user Ricardo (Kadinho) Villela
