After a decision by the Italian government last March to renationalize Alitalia following a failed series of attempts to find an international partner willing to buy a stake into the struggling flag carrier, no official business plan for the future of Alitalia has been proposed by the team that has been put in charge of relaunching the airline.

After much internal struggle resulting from the deep political ramifications of the nomination, Italian Prime Minister Giuseppe Conte confirmed the names of the two men that will be at the helm of the company. Fabio Maria Lazzerini, former Chief Business Officer of the old Alitalia, will assume the role of CEO, while the new chairman will be Francesco Caio, who is also the current chairman of Italian oilfield services company SAIPEM.

The latest decree signed by Conte on Aug. 7 gave the green light to the constitution of the new company that is supposed to represent the skeleton for the new Alitalia. A sum of 20 million euros ($23.7 million) has been made available for capital in the new company. The decree also actioned the payment of 250 million euros that had already been approved to cover the expenses of the carrier during the changeover period as part of the total sum of 3 billion euros that the government has earmarked for the relaunch of the flag carrier.

New Aircraft Possibilities

In the meantime, rumors regarding the possible configuration of the new Alitalia’s fleet are starting to surface. Four anonymous sources revealed to Italian newspaper Corriere della Sera how the staple for the short- and medium-haul fleet will be a number of Airbus A320 aircraft, while the long haul fleet will be based on Boeing 787 aircraft.

Alitalia is already operating 38 A320-200s, plus 22 A319-100s, with the remaining six A321-100 aircraft that will all be returned to the lessor by the end of 2020. According to the sources, Alitalia will acquire A320 aircraft at the price of 39.3 million euros each, against a list price of 91 million euros per aircraft. In case the company chose to opt for A320 neos, the price would increase to 44.5 million euros.

The long-haul fleet — currently including 14 Airbus A330-200 aircraft, 11 Boeing 777-200ER and one Boeing 777-300ER — will be converted into an all-Boeing fleet with a combination of 787-8 and 787-9 aircraft. This decision is very much political, as some sections of the Dreamliner are manufactured in Italy. The average prices Alitalia would pay for the two models would be 108 million euros for the Boeing 787-8 and 134 million euros for the Boeing 787-9, against a list price of 215 million euros and 253 million euros, respectively.

An Alitalia A330 at MIA. (Photo: AirlineGeeks | William Derrickson)

The regional arm of Alitalia, CityLiner, currently operating under a separate Air Operator’s Certificate, operates 15 Embraer 175 aircraft and five Embraer 190 aircraft. The plan would be to replace the entire fleet with Airbus A220 aircraft in the two versions, A220-100 and A220-300, for a unit price of 31 million euros and 36 million euros, respectively. That represents a significant reduction over the list prices of 73 million euros and 82 million euros for the two aircraft types. This would also be a political choice since the same company producing the sections of the Dreamliner also produces the horizontal stabilizer and the central section of the A220s aircraft.

The government has already appointed three advisors to support the creation of the new Alitalia: Studio Grimaldi of Italy will take care of legal requirements, Deloitte will look after the financial aspects of the operation and Oliver Wyman will consult on the business plan. The Ministry of Economy and Finance is responsible for the project and has a maximum budget of 300,000 euros for  2020 that will be shared by these consulting firms.

The ideal timeline reported by Avionews will require a business plan to be approved within 30 days of its completion by the board of the new company and to be sent to the European Commission and to the Italian Parliament for approval by the end of October.

The main stumbling block Alitalia is now facing is scrutiny from the European Union Commission, which is ready to block any plan to rescue the airline with public money unless its new plan represents a significant change from that of “the old Alitalia.” The government’s ideal timetable has a plan finalized in time for all current business units to be absorbed by the new company and start operating under new guidance by the end of 2020.

Lazzerini has confirmed that, should the European Union not approve the plan currently being prepared, Alitalia would have no choice but to declare bankruptcy and be liquidated.

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Vanni Gibertini

Vanni fell in love with commercial aviation during his undergraduate studies in Statistics at the University of Bologna, when he prepared his thesis on the effects of deregulation on the U.S. and European aviation markets. Then he pursued his passion further by obtaining a Master’s Degree in Air Transport Management at Cranfield University in the U.K. followed by holding several management positions at various start-up carriers in Europe (Jet2, SkyEurope, Silverjet). After moving to Canada, he was Business Development Manager for IATA for nine years before turning to his other passion: sports writing.

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