‘Drastic action’ needed in Alitalia turnaround

Alitalia needs "drastic and courageous" action, its chairman said on Thursday after a government minister blamed poor management for a looming crisis at the carrier, which is 49 percent owned by Etihad Airways.

'Drastic action' needed in Alitalia turnaround
One of the airline's airbuses. Photo: Andreas Solaro/AFP

Reports that the country's flagship airline is about to announce up to 1,600 new redundancies have turned the spotlight on Etihad's de facto control of Alitalia, which was rescued from bankruptcy in 2014 by the Gulf carrier.

Economic Development minister Carlo Calenda, who met Etihad and Alitalia executives earlier this week, criticized them for airing the possibility of redundancies without first outlining a strategy to get the long-struggling company back on track.

“The situation at Alitalia tells us that the company has been poorly managed,” Calenda told Radio Anch'io. “It is a totally private company that has significant organizational problems.”

The minister went on to say that management mistakes should not “fall on the shoulders of the employees.”

Alitalia's chairman, former Ferrari boss Luca Cordero di Montezemolo, said redundancies could not be ruled out.

“We need a drastic and courageous plan,” he told reporters in Rome, playing down tensions with the government while also emphasizing that Alitalia had to address its high cost base relative to leaner low-cost rivals.

“What is important is that after so many years, we have to have the courage to change the business model,” Montezemolo said.

He said a plan for the airline's future would be ready in two three weeks.

“The business plan will outline what has to be done to arrive at our objectives,” he said.

“It may be that there will be redundancies, we will see and, on this, reach an agreement with the government, on the basis of a detailed plan.”

Etihad announced last month that it was cutting staff across its businesses in response to intensified competition and a weaker global economy.

Nationalist ire

Alitalia unions welcomed Calenda's criticism of how the airline is run.

“We have been trying to point out for some time now that the solutions to this company's problems cannot come uniquely through cutting staff numbers and salaries,” said Emilliano Fiorentino, the National Secretary of the Fit-Cisl union.

The fate of Alitalia in its partnership with Etihad has also become an issue for Italy's nationalists.

“Calenda has finally woken up and asked to seek Etihad's plans – we have been demanding for two years that the Arabs share their plans for the Italian company,” said Jonny Crosio, a Senator for the far-right Northern League.

Etihad's 49-percent holding in Alitalia is one of a number of strategic stakes it holds in partner airlines around the world.

It owns 29 percent of Air Berlin, 40 percent of Air Seychelles, 19.9 percent of Virgin Australia, three percent of Irish carrier Aer Lingus and 24 percent of India's Jet Airways.

The company has expanded rapidly since its launch in 2003. It now operates a fleet of 125 planes and made net profit of $103 million last year on sales of just over $9 billion.

By Angus MacKinnon

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Italy insists €3bn cash injection for Alitalia is ‘not another rescue’

The Italian government announced plans on Thursday to inject at least three billion euros ($3.2 billion) into Alitalia to help save it from collapse in the face of the coronavirus pandemic.

Italy insists €3bn cash injection for Alitalia is 'not another rescue'
Alitalia check-in counters stand empty at Rome's Fiumicino airport during Italy's lockdown. Photo: AFP

Economic Development Minister Stefano Patuanelli told the Senate the money was aimed at turning the struggling company into the national airline it had been throughout much of its 74-year history.

“This is not another rescue,” Italian media quoted Patuanelli as saying. “This is the company's relaunch.”


Prime Minister Giuseppe Conte's government in March announced plans to renationalise Alitalia as part of a broader economic rescue package.

It then earmarked 500 million euros in support for the entire aviation sector.

The company filed for bankruptcy in 2017 and looked doomed in January when it failed to secure rescues from either the Italian state railway or Germany's Lufthansa.

Alitalia's management had asked government administrators in March to allow it furlough 4,000 of its 11,000 employees until more passengers are able, and willing, to fly.

The carrier's main trade union announced an agreement Thursday to suspend about 6,600 employees for seven months.

Patuanelli said government administrators intended to keep Alitalia's current fleet.

“There is no downsizing at the company,” the minister said.