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Italy’s New Revamped Airline Prepares for September Launch
After years of financial trouble and being on the verge of bankruptcy dating back since May 2017, Italian national carrier Alitalia was put under emergency administration by the Italian government after the majority of its over 11,000 employees had voted against job and salary cuts as a rescue plan.
The situation worsened as the Covid-19 pandemic arrived last year, tragically halting almost all air travel both domestically and internationally for quite some time, leaving many international airlines unable to remain afloat.
There were plans to restructure and save Alitalia by launching a new successor airline, Italia Trasporto Aereo (ITA), to replace the cash-strapped national carrier by July 1.
This transference was initially delayed by lengthy negotiations with various countries and stakeholders, increasing the risk of delaying the launch and destroying the project altogether.
Further delays included the failure of the government to approve and transfer a further advance of 50 million euros ($60 million) to Alitalia as part of an ongoing list of bailouts for revenues lost during the coronavirus pandemic, resulting in many of the airline’s workers having not been paid as per schedule.
“The employees are not getting their salaries on time, and this is a tragic situation,” the chief executive of ITA, Fabio Lazzerini, said in a statement back in April.
ITA had initial plans to start flying in July as the market for air travel was slowly starting to pick up the pace and show signs of increased demand again, and Alitalia’s low-cost rivals have been aggressively announcing new routes to Italy for the summer, making ITA’s launch all the more difficult.
“We aim to start flying on July 1 with a small number of aircraft that will gradually grow over time,” Lazzerini said at the time, putting the number at 47 passenger aircraft and two or three for cargo transport.
Missing the Peak Summer Holidays
However, not all will go as planned as the state-owned successor will only start flying in September, missing the important summer holiday season.
The result of the massive delay was due to talks with the European Commission over state financial aid having reached a stalemate, Lazzerini mentioned.
Negotiations between Brussels and Rome have been tough as each party has a different view on how to allow ITA to process while still complying with the European Union antitrust laws, as the commission has been demanding a clear discontinuity with the past, including getting rid of Alitalia’s slots at Milan Linate Airport.
ITA has also been trying to convince Brussels that it needs to retain ownership of Alitalia’s ground handling and maintenance businesses, but there has been a lack of progress in these discussions.
Besides its talks with the European Commission, ITA has also been negotiating with Lufthansa on one side and Air France-KLM, Delta Air Lines and Virgin Atlantic on the other about a possible alliance partnership “that is not only European but also transatlantic,” Lazzerini added.
The idea is to firstly start with commercial partnerships and later to try to bring foreign carriers into the shareholding of ITA. A decision on an international partner is expected by the end of June, he said.
Industry Minister Giancarlo Giorgetti, who is currently responsible for Alitalia’s management, is due to meet EU Competition Head Margrethe Vestager in Brussels on Wednesday.
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