Failed Italian flag carrier Alitalia announced on Tuesday that it will finally stop selling tickets for travel after October 15 from midnight this evening. On the same date, the heavily debt-laden Alitalia will be shuttered and replaced by a brand new state-owned airline known as Italia Trasporto Aereo or ITA.
Alitalia has been in extraordinary administration since 2017 when major equity investor Etihad Airways cut its losses and refused to sink any more money into the financial black hole that was Italy’s longest-running airline.
The Italian government has propped up Alitalia with taxpayer-funded loans ever since much to the dismay of the European Commission who has frowned upon the lavish state aid afforded to Alitalia. Attempts to sell off Alitalia failed on several occasions and then the pandemic delayed attempts to deal with the problem still further.
In the end, the Italian government struck a deal with the European Commission to create ITA as a fully independent airline that wouldn’t be liable for paying the millions of Euros that Alitalia had been handed from state coffers.
ITA will start flying on October 15 and raise €700 million to buy assets belonging to Alitalia. This will likely also include the Alitalia brand name.
Yes, that’s right. ITA will unlikely ever be marketed as the actual airline because it will bid to continue to use the Alitalia name. The parent company will at least save significant sums of money on repainting aircraft it will acquire from the old Alitalia and rebranding Alitalia’s old signage.
A condition stipulated by the European Commission was that Alitalia’s intellectual property rights would be put out for public tender – opening up the possibility of a bidding war for the Alitalia name.
ITA, however, says the Alitalia brand is an “essential element in carrying out its industrial plan”. If it wins, many consumers may not even realise that Alitalia was shut down.
Based primarily out of Milan Linate, ITA will automatically acquire 85 per cent of Alitalia’s old slots. The airline will also takeover 43 per cent of Alitalia’s slots at Rome Fiumicino.
Although ITA plans to start off with a fleet of around 52 aircraft, including seven widebody jets, the airline hopes to grow its fleet to 105 aircraft by 2025.
Nearly 3,000 of Alitalia’s 11,000 strong workforce will be employed by ITA straight away but that number could rise to nearly 6,000 by 2025. ITA will continue recruiting from Alitalia’s old employee database before recruiting externally.
The industry ministry says it will “activate safeguards” for unemployed Alitalia workers while they wait for a job in the new airline.
