This week’s featured link:
Navarro clashes with State Department over UAE airline deal – Associated Press
Remember how I said there were differing views on the impact of the US agreement with the UAE? Well, that was quite the understatement. There are actually differing views between the State Department (which is correct) and the White House (which is not). This is pretty embarrassing, to say the least. I’ll have more on this next week when I talk about Delta’s decision to go back into Mumbai.
Two for the road:
An Allegiant Air Executive Popular With Wall Street Resigns – Skift
Lukas Johnson has left Allegiant to become CEO of Canada Jetlines, an ultra-low cost startup based in Vancouver. While Allegiant still has people who know how to run an airline, it’s not clear that any of the people left will have a seat at the table. Lukas was the last of the execs over there who really understood that part of the business, and with him gone, I hope someone can step in to keep it running. Otherwise the company will continue to get distracted by IT projects and building condos.
Italy’s 5-Star, League plan to halt Alitalia sale – Reuters
Sale? What sale? The new government seems to have an interest in re-nationalizing Alitalia to restore it to its former glory. Oh wait, what glory? I, for one, am glad to see this. It’ll provide fodder for me for years to come.
It’s like I said…the US3 lost and the ME3 won..provided you think this was all about 5th Freedom flying and not subsidies. Which you would have to have extreme tunnel vision not to think given the PR mess that transpired after the agreement was announced. Nobody fought over what the subsidy part meant. Everybody fought over what the 5th Freedom flying part meant.
you’ll have to let us know what the definition of “winning” is but the ME3 airlines are seeing traffic shrink – each for different reasons – while the US3 are all growing and profitable. 5th freedoms might have been the public issue but the real issue was the viability of each model. For the first time in a real long time, the US airlines are leading the global airline industry in profitability which provides the ability to grow.
as for Alitalia, for whatever reason, Italy clings to the notion of having a national airline. All they have to do is figure out how to make it work within EU rules – or more significantly, how to tell the EU that Italy doesn’t care what the EU thinks on the issue of AZ because that is what the whole AZ case has really come down to. Given how fragile the EU is, AZ seems like a nagging issue in comparison with much larger issues that could pull the whole union apart.
Someone, somewhere is making a LOT of money off Alitalia, probably not directly so maybe indirectly. There can be no other reason.it’s been kept on life support so long. Tax write-offs? Bags of white powder in the waste bins? Who knows?
I’m not very familiar with Alitalia’s labor situation, but my first guess would be that the unions are making a ton of money off of it, and keeping wages well above market. My second guess would be that consultants are probably making bank, and don’t have much incentive for the airline to really turn around, as it would no longer need their services then. Third and final guess is that the execs and top management are getting (or will be getting) some nice bonuses for “repositioning the airline for growth” or some such nonsense.
I don’t disagree that there is probably some sketchy/illegal stuff going on, but I generally don’t attribute things to malice or organized crime unless I attribute them to flawed incentives first.