LONDON – According to Italian Industry Minister Stefano Patuanelli, Alitalia (AZ) has a reported a bank balance of US$262m (€232m), as the Italian government prepares to take over the airline that has burned its cash reserves during the Coronavirus pandemic.
The nationalization of the loss-making airline comes after 11 turbulent years of various management and failed restructuring attempts.
At the beginning of 2020, Alitalia received US$452m (€400m) from the government. It was set to receive US$3.4bn (€3bn) in May. Three years before that, the government also granted US$1bn (€900m) which the airline did not payback.
Minister Patuanelli stated in a parliamentary hearing that “as of May 31 the company had US$262m (€232m) in liquidity” and that “revenue between January and May amounted to US$570m (€505m). In the same period last year, the carrier recorded US$1.2bn (€1.1bn) in revenue.
Fresh Investments for a relaunch
Italian Transport Minister Paola De Micheli also addressed parliament on the [re] nationalization plan for the airline and said how the government would invest in aircraft with particular use for long-haul operations.
Following the easing of the three-month Coronavirus lockdown, last month, Rome announced that it would inject US$3.3bn (€3bn) of fresh capital into AZ to relaunch it as a new public company.
The nationalization of the airline was due to happen in early June but it has not taken shape and the ministers have not given a time frame either. On Tuesday, De Micheli commented that they are “re-designing an entire sector of national transport” and that AZ could not be “a small-scale company.”
Rome Fiumicino (FCO) will remain key to the new operations; however, De Micheli noted that the new industrial plan would also envisage investments in Milan Malpensa (MXP) for AZ’s long-haul operations.
Another silver lining for Alitalia?
The Transport Minister also added that the airline needs to reduce the average age of its fleet, “allowing major savings on fuel and a reduction of the environmental impact and maintenance costs.”
No information was given by the ministers on potential partners for the new airline. AZ’s previous alliances with Delta Air Line (DL) and Air France-KLM (AFKL) expired last month.
For now, it may seem that what has been a relatively uncertain situation for AZ over the last few years may actually be coming to a positive end.
It will be interesting to see whether the Italian government can turn the flag carrier around and maybe generate it back to a profitable position where appropriate.