Once again, it has been way too long since I checked in on Alitalia. I mean, there’s been plenty of action for my favorite airline to hate, but of course, nothing has actually happened. It’s all more of the same.

What prompted me to write this time? It’s Alitalia’s annual depressing shareholder meeting. Alitalia’s latest Chairman Aristide Police said that they were screwed, basically, unless everything magically goes well unlike anything that has ever happened before. In true Italian fashion, shareholders made loud and ridiculous claims that the airline needed an exorcism or that the senior managers should be stripped of their Italian citizenship. Um, yeah. That’ll help.

But really, things are just bad all around. The EU remains hot on Alitalia’s tail, and has launched an “in-depth investigation” of the loan from Italy. Yeah, this could get ugly if they decide it’s illegal (and it’s surely illegal).

But wait, there’s more. Why focus on Alitalia’s management when it’s almost always the Italian government pulling the strings and making things worse. Let’s just look over to Italy’s fearless leader, Silvio Berlusconi, for a little entertainment.

I think Alitalia will need to find accords with international partners and … Air France could be a good solution

Arrrrggggghhhh!! I hate you, no wait, I love you. No, I hate you. Ok, maybe I kind of like you. Really, will this fun ever stop? I hope not. It provides me with way too much entertainment.

That was a couple weeks ago, and now I think it’s safe to say that ship has sailed (though I guess you never know). Apparently, the airline has one last shot for salvation, and it ain’t the Pope. Intesa Sanpaolo is an Italian bank that has been appointed adviser to Alitalia. It is supposed to come up with a plan to save this wreck, and it should take at least another month before they even have the chance to sift through the airline’s messy books.
So for now, well, nothing has changed. *sigh*

Man, this has been a busy week. I know I spent half of it lounging around Peru, but long vacations always make it harder to catch up on work when you return. Combine that with the fact that I’ve got a new job at PriceGrabber (Director of Community), and I’m just struggling to make it to the weekend. So, let’s get to what I missed in the international world and I promise I’ll have some more extensive stuff ready for next week.

Nationwide Goes Down – It’s not just US airlines that are dropping like flies. Looks like Nationwide Airlines out of South Africa is the latest casualty. To be fair, these guys didn’t really have their stuff together in the first place. I mean, they were grounded last year when a friggin’ engine fell off one of their planes. When something like that happens, it’s not easy to recover. They didn’t.

Virgin Atlantic Thinks You’re Pretty Enough – At least half the time someone brings up Virgin Atlantic, it’s quickly followed by a mention of the inflight massage and manicure. Of course, that was only available in Upper Class, but now it’s not available anywhere. Virgin has decided to kick the beauticians off the plane. So, you’ll have to get a massage or manicure beforehand. I know, rough life.

Neeleman Has Only One Name Idea – You’ve started a successful low cost carrier named JetBlue, and now you’ve moved on to found a Brazilian airline. What should you call it? Well, the plan was to have a naming competition, but that ended with the name Samba, and apparently he didn’t like that. So he went with choice #2 – Azul. Yep, that means Blue in Portuguese. Geez, so creative.

Alitalia Grabs Illegal Loan – Ah, my favorite subject. Italians are now 300m euros poorer since the government decided to loan Alitalia the money to keep the airline afloat. Of course, it’s already been challenged by the EU, and Italy has to somehow justify how this is legal. Good times.

I know you guys have been champing at the bit, waiting for an update on the latest with Alitalia. I’ve actually been wanting to write about this for a little while, but I figured I’d wait until I went to last night’s launch party at LAX for the new LAX-Rome service. It was a surreal event; like hanging out on the Titanic while half the ship is already under water.

As for the event itself, it was a relatively nice and simple affair over at the always fantastic Flight Path Learning Center. The food and Peroni were good, and they handed out a few freebie tickets on the new LAX nonstop. I think the highlight was when Alitalia’s North America head said that the current situation made it seem like Alitalia should be on Jerry Springer. At least he has a sense of humor about it. I actually felt sorry for some of these guys. So what exactly is the latest?

When we left off last time, Alitalia had accepted the AF/KL bid and even the government had gotten behind it. But, they still needed to get the unions to back the bid. Um, that didn’t happen. And even worse, the Italian government fell apart. Without the approvals they needed, AF/KL walked away, but I’m sure they’d come back if all the other parties decided to stop acting like children.

In the election for the new government, Alitalia, the symbol of national pride (what a horrible symbol), was one of the top campaign issues. Silvio Berlusconi, the man that the Economist called “unfit to lead a modern democracy“, campaigned on the idea that he could prevent Alitalia from falling into non-Italian hands.

Sadly, he won.

So now, not only are the unions against AF/KL, but so is the government. Let’s be clear here. Berlusconi talks a big game. He’s said:

Many businesses, including big ones, have come forward to guarantee the necessary capital for a completely Italian team which, once it knows the accounts of Alitalia, will be able to present a bid.

Um, no. Or, somebody will come forward, but it won’t be even close to being as attractive of a bid as the one from AF/KL. Really, AF/KL is the only true hope for this company to survive, and Berlusconi is beating his chest, acting proud, and sounding like a complete idiot. Of course, he has to cave, but not until he can save some face. Just yesterday, he said:

As concerns the Air France hypothesis, if we went back to the initial project for Alitalia which gave the same weight to Alitalia as the other two airlines as well as being Italian orientated, I would be happy to discuss the possibility and once I take office I will speak about this subject with President Sarkozy.

See, he’s starting to change his tune. You know what’ll happen next. He’ll get a couple of concessions and then he’ll let AF/KL buy the airline. Then he’ll try and look like a hero even though he’s doing nothing good.

I guess I should be happy about this. When AF/KL is allowed to take them over, it’ll probably mean I’ll have to find another “Worst Airline Ever” to pick on. I’m just going to enjoy this for now.

You might think that I’d be sad to see Alitalia accept the Air France/KLM takeover bid but you couldn’t be more wrong. The fun is really just beginning.

When I was in school, I remember the guys from TPG coming in to talk about takeovers. They said there was no company too awful to take over. Even the worst companies could be attractive, as long as the price was right. I’m pretty sure Air France/KLM followed that school of thought when they made their bid for Alitalia.

AF/KL offered 1 share for every 160 outstanding shares of Alitalia. That values each share at about 10 euro cents, an 81% discount over the closing price on Friday and still two and a half times its closing price today. Over the weekend, the Alitalia management team voted to support the bid, so why is it still valued above that level? Because somebody must think this deal may not happen as is.

I wouldn’t be so sure that we’ll see much movement. AF/KL was pretty clear here. That’s what they’ll pay, but they’ll still only do it if the government, unions and EU all back the bid. Everyone who thinks that’s going to happen, raise your right hand. Now, raise your left hand and slap yourself in the face. Getting everyone behind this bid is going to be virtually impossible.

The infrastructure minister of Italy aid, “This is a proposal aimed only at creating profit for the bidder, that is harmful for the company, for the workers and for the country.” Despite those feelings, the government did come out in support of the bid on Monday. But that’s the easy part. Let’s see if they can get the backing of whatever government wins the upcoming elections along with some important local politicians (Milan’s government, for example).

But before that happens, it’s time to convince the unions to play nice. Will it happen? What does this picture of some union members tell you?

The unions were apparently so up in arms over possible job cuts that the members were even throwing eggs right before the arrival of AF/KL’s chief exec. Like I said, the fun is really just beginning.

[Photo Credit: Dario Pignatelli/Reuters]

It’s been a month and a half since we last checked in on Alitalia, and I feel bad. I try not to neglect my favorite airline to hate, but it looks like that’s been the case. So what’s new? Nothing.

Ok, so a lot is new, but the theme is the same. The situation gets worse and worse every day and there’s no end in site. But let’s get caught up on the details.

The Italian government did finally decide to pick the Air France/KLM deal as their favorite, so the two airlines entered into talks. Then, the Italian government collapsed. Oh boy. There’s lots of speculation that the collapse of the government means that this deal is in trouble, but we really don’t know. The players all deny that this will hurt anything.

So how bad are things for the airline? Really bad.

It looks like they need 750 million euros by the middle of the year just to survive on their own, or at least that’s what they say. They continue to lose over 1 million euros per day, but at least they’re making some real changes this summer.

The word is out that they’ll reduce flights to Milan from about 660 per day (that sounds high, but it’s what the article says) to only 75. This is part of their recovery plan, and it’s consistent with what Air France/KLM would do – focus on the Rome hub.

How are they rewarded? The operator of Milan airport is suing them for 1.25 billion euros in damages for pulling out of the airport. Are you freakin’ kidding me?!? Sadly, no. They say they made a bunch of investments in the infrastructure of the airport for Alitalia, and now Alitalia owes them if they pull out.

If I’m running Alitalia at this point, I’m just planning on grabbing some grappa and drinking myself silly until I forget about how absolutely absurd this is. Even if they do something right, they get hit with backlash. Someone please shut this airline down.