Scoop: Alitalia To Cancel A321neo Order

Scoop: Alitalia To Cancel A321neo Order

MIAMI — Last month, Airways reported that Alitalia was ready to take delivery of three Airbus A321neos while it continues to operate under exclusive administration.

As the carrier continues to fly in the face of mounting uncertainty over its future beyond 2019, Alitalia was about to embark on a small scale fleet modernization, which would see a limited number of second-hand new generation Airbus A321neo join its fleet in the coming months.

These incoming new generation Airbus A321neos, previously operated by now-defunct Primera Air, would have enabled Alitalia to reap the immediate financial benefits of lower fuel burn on many of its popular routes.

Photo: Adrian Pingstone (Arpingstone)

However, sources have revealed to Airways that the acceptance process of the three A321neos has been “frozen.”

“Unless of new surprises in the coming weeks, there will be no arrival of new aircraft replacements for the eldest A321s in Alitalia’s fleet.”

Currently, Alitalia operates some of the oldest A321s in the world. Some of which have been flying for as long as 22 years.

Following the resignation of Alitalia’s Commissioner, Luigi Gubitosi—who had strongly supported the A321neos choice to renew the eldest A321s in the fleet—the current management of the airline considered it was “more prudent” to cancel the leasing agreement of the three planes.

Gubitosi said goodbye to Alitalia in November after what he deemed as a “very positive transitional period.” He moved on as CEO of TIM, an Italian telecommunications company.

Photo: Adrian Pingstone (Arpingstone)

“Alitalia continues to grow at double figures,” he wrote in a public letter to the airline’s employees. “Our operating performance sees us as one of the world leaders. In January, three Airbus A321neos will arrive, marking the beginning of the modernization process of our fleet,” he wrote.

These statements from Gubitosi, however, are contradicted by Andrea Giuricin, a renowned Italian Economist and researcher.

“Alitalia’s market share in 2018 fell below the 14% mark,” he told Airways. “Compared to 2017, the market share loss was higher because the market runs much faster than the Italian company.”

Giuricin published his findings on Alitalia’s 2018 performance. “In the first nine months, Alitalia lost €313.2 million—almost €1.2 million per day. And during the winter, it loses even more than €2 million per day.”

The Bad Fate Of Three A321neos

The three ex-Primera Air Airbus A321s—registered OY-PAC, OY-PAD and OY-PAE—owned by leasing company Aviation Capital Group (ACG), were the ones chosen by former Commissioner Gubitosi.

The Italian airline had concluded the agreement to lease these three new planes, all of which are ready to be re-painted into Alitalia’s colors.

A321neo (EI-LIA) • Newquay Cornwall • Photo: Phil Salter

The first plane, former OY-PAE (MSN 8312), was withdrawn from service in October last year, about one month after being delivered from Airbus to Primera Air. Today, the plane carries the new registration for Alitalia, EI-ITA.

The second A321neo (OY-PAC • MSN 8260), was re-registered EI-LIA. The third, and last plane, (OY-PAD • MSN 8288), bears now the registration EI-GHV.

Interestingly, for the aviation enthusiast community, the first two planes carry the EI-ITA and -LIA registrations. If put together, it says ITALIA.

Flying in all directions

Although Alitalia has not issued an official statement on the cancellation of the Airbus A321neo lease, several aviation forums in Italy confirm its veracity.

Airways reached out to Alitalia to confirm the cancellation. However, did not wish to comment further.

Now that the airplanes have been re-registered, it is very likely that Alitalia will have to pay a fine for abruptly exiting the contract—yet another blow to an airline that’s flying on life support.

Alitalia continues to rack up as much as €3.3 billion in debt, keeping its planes in the air thanks to hundreds of millions of Euros in state loans.

The Italian carrier has been negotiating, tirelessly, with competing airlines for a potential takeover, including low-cost carriers easyJet, Ryanair, and even legacy carriers like Air France and Lufthansa.

Recently, there was some chatter which put both Alitalia and Delta Air Lines in the same room negotiating a potential partnership between both carriers, with Delta keeping a 49% stake in Alitalia. This, however, has not been confirmed or denied by the Atlanta-based carrier.

The deal with Delta might be tied to the potential takeover of Italy’s national rail system provider, Ferrovie dello Stato, over Alitalia.

Reportedly, the national train company could be a suitable bidder to take over the ill-fated Italian airline, which would also entice Delta to expand its investment portfolio outside the United States.

Italian media report that the Ferrovie dello Stato’s takeover plan will be unveiled to the public before the end of January.

Overall, should the A321neo cancellation materialize, Alitalia would show tremendous disarray in what should be the most orchestrated airline management office in the world.

As the airline continues to fly under special administration, the horizons seem quite far from clearing up.

Commercial Pilot, Embry-Riddle Aeronautical University. Aviation MBA, Globetrotter, AS Roma fan, and in my free time, I fly the Airways Ship.

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