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.
