Alitalia is Dead, Long Live Alitalia

Alitalia, Worst Airline Ever

A day that we never thought would never come has now arrived. Alitalia has been moved to hospice where it is expected to die a peaceful death on October 15… or is it? Oh sure, the current Alitalia will die, but we’ve seen this movie before. Get ready for the zombie to return.

Technically the current iteration of Alitalia will cease to exist on October 15 and it will be replaced by ITA. What is ITA? It’s a slimmed down version of today’s Alitalia, just with a different name. I would bet that will change. See, the only reason that the new airline isn’t called Alitalia is because the European Commission wouldn’t allow it. The EC is fed up with Italy’s constant need to pour money into the airline, and it’s really furious that this new airline is going to avoid having to repay that state aid that Alitalia has accrued over the years. So the EC set some boundaries here to try and end the cycle of ridiculousness.

The new company can’t just take the Alitalia name, but wanna know something? It can buy it at auction. As much as I’d love to raise money and try to outbid ITA for the Alitalia name, there’s only one way I can imagine this ending. The Italians love the Alitalia name, and have a strange pride in it. They want to see it continuing to fly. I just assume that ITA will become Alitalia.

You would think that the Italians might try to pitch this as a cost-saving measure. After all, they wouldn’t need to repaint the airplanes. But let’s be honest. Of course they’ll repaint the airplanes. As all successful airlines know, there’s nothing more important than a new livery every time you reinvent yourself.

Even if it keeps the name and, miraculously, the old paint job, that doesn’t mean the new airline will be the same as the old one. In fact, it will be a shrunken-down version of its former self. ITA — as we’ll call it to differentiate from the old company even though I’m still betting it will take the Alitalia name — will start with only 52 airplane and fewer than 3,000 employees. That’s about two-thirds of the fleet it has now, and it’s less than a third of employees. But don’t be fooled by those employee numbers. Some of those are with related businesses like maintenance that will likely stand on their own.

Of those airplanes remaining in the fleet, only 7 will be widebodies. I assume there will be one 777-300ER, two 777-200s, three A330s, and one DC-10 just to ensure maximum complexity. Once the new airline starts, it will be off to the races with plans to reach 78 next year and 105 by 2025. Where will all that growth go? Nowhere profitable, I think we can all agree. After all, ITA will have a problem. It is keeping 85 percent of the slots Alitalia has today at Milan’s close-in Linate Airport — which, remember, is not usually considered a hub but occasionally is if the wind blows the right direction — and only 43 percent in Rome, the airport that actually is consistently a hub for the airline.

If all this change is making you unsettled, don’t worry. If there’s one constant we can count on, it’s that the unions are still angry about all this and are protesting the planned labor cuts. Now it feels like normal.

The reality in all this is that Alitalia, ITA, or whatever you want to call it is simply a vanity project. Italy does not need a failing flag carrier. Ryanair, easyJet, Wizz, Volotea, and Vueling all combine to have more than 5 times as many seats departing an Italian airport in August compared to Alitalia. Ten years ago, they had only 1.3 times as many. Looking at US – Italy flying in August 2011, Alitalia provided about a third of seats in the market. This August, it’s down to 14 percent. Other airlines will gladly fill where there is real opportunity.

Legacy carriers from other countries can continue to provide the lift Italy needs from a business perspective, and low-cost carriers can serve the rest. ITA is a relic of a previous time, and it has no real place in the world. But hey, it wouldn’t be the Italians if they didn’t try, and that should be worth something, right?

To reward those efforts, I am proud to announce that whatever this new airline is called will officially take over the title of Worst Airline Ever. I won’t bother updating the logo for them, because I still say it’ll be Alitalia in the end. Regardless of the name — and with great apologies to Air India and Aerolineas Argentinas — it just can’t be anyone else.

Get Cranky in Your Inbox!

The airline industry moves fast. Sign up and get every Cranky post in your inbox for free.

14 comments on “Alitalia is Dead, Long Live Alitalia

  1. It would be like asking Air France to change their name. It’s just not gonna happen.
    The Alitalia name isn’t going away, and why should it?
    Let the name stand as a tribute to all the mismanaged European national airlines of days gone by.

    Their inept management brought us a 34-inch pitch in coach, caviar for all in business class, and a parade of newly designed cabin crew uniforms from Europe’s top fashion houses. Whether they needed to be replaced or not.

    I realize for some of your readers this is all just a fantasy. But I’m old enough to have enjoyed the fruits of wasteful spending.
    Wow, I miss the good old days!

  2. Here lie Alitalia, friend to all AV geeks across the globe. Stories are what legends are made of. Good bye, you will be missed *sound of taps*

  3. I was going to ask if Aerolineas Argentinas is still considered #2 (haven’t followed them much, and didn’t know if they were still around, given all the travel restrictions in that part of the world), but your last paragraph confirmed that they are still in the running for their usual spot in the ranking, and that’s good enough for me. :-)

  4. So the Bloviating Bureaucrats of Brussels don’t like the name Alitalia? I’m sure that this time the Italians will agree with them, and I also have some beach front property in Oklahoma I can sell you.

  5. Who wants to bet on how much of the market Air Dolomiti (so, Lufthansa) will soak up while this unfolds?

    Thing with Italy is, about the longest domestic flight is two hours gate to gate, so ULCCs aren’t sufficiently uncomfortable (not that Eurobusiness is much of an upgrade). So you want point-to-point plus someone who’ll feed to *someone’s* hubs to support long-haul. Doesn’t have to be a flag carrier’s. Greece’s situation with Aegean is an excellent example of this…which is probably why Lufthansa wants to pull Alitalia into the Star Alliance fold.

    And also why DL would probably be happy with Alitalia dropping their long-haul fleet, with DL running as many seats as needed JFK-MXP/FCO and ATL-FCO. And, if DL could get the thumbs-up from the Italian government, tag FCO-LIN onto ATL-FCO on a 767-300, for widebody prestige points.

  6. Cranky, how about starting a ‘go fund me’ account so that you can lead a group of US investors to buy the Alitalia name at the auction? I’m in!

    1. As much as I love the idea, I doubt Italy would allow/respect others’ legally purchased rights to the “Alitalia” name once they found out that a bunch of foreign avgeeks bought the brand just to mock them.

  7. The EU has complained about Italy’s flouting of the state aid rules for many years now, but they’ve never done anything about it…and I doubt they will when ITA/”New Alitalia” starts needing infusions of government money even in good times.

    This is one of the frustrations of the EU, the way some members are allowed to get with breaking the rules (in spirit if not technically in letter): Germany ignores the current account surplus guidelines, France just pretends the deficit rules don’t exist, and Italy addicted to handing out state aid.

    (yes, some of those rules are actually issued by the ECB, not the EU, but if you believe the ECB is independent of the Commission I have a bridge to sell you.)

  8. Talk about pot and kettle….

    How much money was wasted on that other vanity project called the Airbus A380?

  9. I know Brett’s fondness for Alitalia, but in terms of failed airlines I would offer Surinam Airways as well. Here is an airlines that has no airplanes (their last operational aircraft was chained up by the lessee at MIA for outstanding bills), enormous debt, a corrupt governing structure (including the Surinam government) and yet still they persist.

  10. What a mess. It’s a lovely airline when it works. It has cost Italian taxpayers (and EU bond holders) billions. Its workforce is a joke.

  11. There are several other national airlines that refuse to die.
    I think South African Airways beats Alitalia for incompetence and pure corruption. SAA hasn’t flown a flight in over a year, yet somehow the government is still pumping money into it in hopes of reviving it. And somehow SAA is still part of Star Alliance!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Cranky Flier