Alitalia’s Turnaround Plan Looks Very Familiar

On January 1st of this year, Alitalia officially became a “new” Alitalia with partial ownership by Etihad. Does this mean Alitalia is no longer the worst airline in the world? Oh please. Sure, Etihad was quick to bring some of its own people to work on the Alitalia project, and big changes were promised. Now, the new strategy has officially been announced, and it looks a lot like what was proposed last year. It also looks similar to the one that Alitalia abandoned last decade after the merger with Air One.

Alitalia Worst Airline Ever Again

I highly recommend a read through the press release (on the Etihad site) announcing the new Alitalia. The first 600 words of the 1,000 word release contain absolutely no substance but hey, everyone needs to get a quote in, right?

Luca di Montezemolo, Chairman of Alitalia said “The energies, passion and expertise I have experienced at Alitalia in recent weeks do not leave any doubt that the airline we’re unveiling today will become once again a premium Italian airline recognised worldwide. This is why I believe the people in Alitalia are a pillar of the history we’re about to write.”

And the new CEO Silvano Cassano is excited… and serious. “The new Alitalia strategy is serious, it is exciting and it is commercial. It is a strategy for success – if everybody delivers.”

Those last three words are really the issue at hand. Etihad CEO James Hogan didn’t mince words in that regard. “…anything other than rapid, decisive change is simply not an option.” The airline needs to be profitable by 2017. Anyone want to make bets?

So how will this miracle of profitability occur so quickly? Here’s how.

Network
This is where this whole plan starts to sound like déjà vu. The see-saw that is Milan will once again regain hub status. You might remember that Malpensa (which, hilariously, means “bad (or evil) thought” in Italian) was going to be a big, important hub around the turn of the century. Everything was going to be moved over there from close-in Linate. Riiiight.

By 2008 when Alitalia was reorganized and merged with Air One, the opposite plan went into place. Alitalia decided to cut Malpensa while growing Linate. In the end, the only hub was Rome.

Now, Etihad steps in and says, “hooray, let’s do both!” Now Malpensa will grow once again and become a long haul hub. It will see the reintroduction of 4-times-weekly nonstops to Shanghai, and there will be more frequencies to Tokyo. Oh, and did I mention daily nonstops to Abu Dhabi? Of course that’s the plan. But I’ll get to that more in a minute.

Linate is now going to grow as well and become its own hub. What’s going to happen there? Well, Alitalia is going to basically feed partner hubs from there. I can only imagine the idea is to provide the ability for business people closest to Linate the ability to get most anywhere with a single stop. (And important business markets will be served nonstop.)

Then there’s Rome. Etihad has big plans for Rome with new flights to a ton of cities: Berlin, Dusseldorf, San Francisco, Mexico City, Santiago, Beijing, and Seoul. More flights are going to be added to New York, Chicago, Rio, and yes, Abu Dhabi.

Abu Dhabi will not only have widebodies from Rome, Milan, and Venice but there will also be smaller aircraft going from Bologna and Catania. It’s all about feeding the beast. And of course, the beast isn’t just in Abu Dhabi anymore. Notice the new flights from Rome to Berlin and Dusseldorf. That brings us to the next point.

Cooperation
Sure Etihad will get some good traffic from Alitalia via Abu Dhabi, but long-bleeding Air Berlin will get a shot in the arm as well. Really, Etihad is trying to walk a tightrope here. It says it wants explore “further opportunities to deepen the relationships with Skyteam members and in particular Air France/KLM and Delta.” At the same time, it says Alitalia will have a “major” partnership with Air Berlin. There will be more coming with other airlines beholden to Etihad including Air Serbia and Etihad Regional getting in on the action. Sounds like a lot of growth for an airline that can’t make money at its current size. So how will this growth even happen?

Fleet
Ah, there it is. Alitalia is, as planned before, actually cutting its short haul fleet by sending 14 A320s over to Air Berlin. (Why Air Berlin needs more airplanes to help it lose money is beyond me.) But it’s specifically noted that Alitalia could take some of the widebody airplanes that Etihad has already ordered. Etihad basically shifts airplanes around between airlines as it sees fit. Now Alitalia joins that party. But will people fly this airline?

Guest Services
People often think I gave Alitalia its title because of a poor customer experience. That’s not true at all. The title is awarded simply because of how poorly the airline has been run. Still, Etihad thinks there’s room for improvement on the customer service side. The airline basically wants to make Alitalia into an airline with a “customer-first” culture. Good luck with that. Time and time again, both management and labor at the airline have made it clear that it’s a “me-first” culture over there. So why will it be different now? Well…

Brand
Oh of course. What Alitalia needs is a new brand, including a new livery, right? No. But that’s what’s happening. The name will stay but everything else changes. Oy. Apparently the airline needs a new brand that will “capture and embody the essence of Italy.” Seems to me that the current Alitalia captures the essence of Italy quite well.


So there you have it. The only thing of substance here involves network and fleet changes. The rest is all fluff at this point. Maybe we’ll see big changes and Alitalia will be profitable by 2017. Seems plausible, right? Yeah, right.

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