MIAMI – Italian newspaper La Repubblica gives an extensive and clear picture of how complicated and dim the future of Alitalia (AZ) or, under its new avatar, ITA-Italia Trasporto Aereo is.

According to the Italian newspaper, the EU Commission on Competition Policy, headed by Margrethe Verstager, has put even more stringent conditions on the transfer of assets from AZ to a new airline, whatever its future name might be.

The Italian Ministers Daniele Franco, Economy and Finance, Giancarlo Giorgetti, Economy Development, and Enrico Giovannini, Infrastructures and Transports, on March 26 attended a virtual meeting with the EU Commissioner during which were discussed the non-negotiable limits that the EU has set on the transfer of assets.

The first condition known for a while is the one concerning continuity between AZ and the NewCo: there should be none, meaning a complete cut between the two entities.

Alitalia’s Boeing 777-243ER rotating from LAX airport. Photo: Luca Flores/Airways

Fleet Resized to 45 Aircraft, Reduced Staff

The second is the size of the Airline, with 40 to 45 aircraft, and a workforce attaining a maximum of 3,000 employees, no handling and maintenance divisions and. In addition, as a condition within the condition, the company has to hire future personnel on the open market, excluding the possibility to transfer staff from the old to the new company. As a consequence, only the Aviation division may be directly acquired from the former AZ.

As a result, 11,500 AZ workers, which, for at least a large part of it, approximately 8,000, would remain with the old company in liquidation and most probably find themselves without a job.

On this subject and on the overall future of the company, AZ unions, representing both flight and ground staff, staged massive protest rallies on March 26 at Rome-Fiumicino Airport (FCO) and at the Ministry of Economy Development. Three Italian Ministers tried to obtain an increase in the number of aircraft the ITA may have and, consequently, secure more workplaces.

Alitalia Airbus A321-100 EI-IXV – Photo : Milan Witham/Airways

Handling, Maintenance, and MilleMiglia to be sold

The carrier’s Handling and Maintenance divisions as well as the frequent flyer program MilleMiglia are to be sold under an open public tender.

Furthermore, the Commission wants to impose an international alliance on ITA, and on this aspect, two issues are present: either Skyteam’s founder Air France (AF) makes a move to keep AZ in the alliance or Lufthansa (LH), which apparently is the Italian government favorite, steps in and the NewCo joins the Star Alliance.

Another point of attrition is the EU request that AZ relinquishes part of its slots at Milano-Linate (LIN) detained at 70% by the Italian flag carrier.

In all, the virtual meeting has been defined as constructive by the EU and works will now continue at a technical level. The decisions taken appear to be final but no launch date for the NewCo has been announced. The Italian government wishes it would be as early as possible to take advantage of the normally lucrative summer season.

European Commision, Brussel. Photo: Drow male – Own work, CC BY-SA 4.0.

Latest Developments

The latest news is published on Il Sole 24 Ore from today, an authoritative financial newspaper. The news outlet states that the EU Commission has authorized a financial aid of US$29.6m (€24,7m), against a request of US$66m (€55m), which compare poorly with the total aid of US$ 14.4bn (€12bn) allowed for AF and US$12bn (€10bn) for LH.

EU Commissioner Margrethe Verstager commented on the aid by saying, “the aid being authorized will further compensate Alitalia on damages incurred because of the COVID-19 pandemic during November and December 2020.”

Featured image: Alitalia Boeing 777-300ER EI-WLA – Photo Misael Ocasio Hernandez/Airways