Italy to re-nationalise Alitalia

ROME: Italy’s government said on Tuesday it will re-nationalise the bankrupt former national carrier Alitalia to make sure crises like the coronavirus pandemic never strand its compatriots abroad.
Prime Minister Giuseppe Conte’s decision was revealed in a government decree published late on Monday after more than a week of debates.
It comes as part of a broader 25-billion-euro ($28 billion) coronavirus response plan and will reportedly cost Italian taxpayers up to 600 million euros ($670 million).
The 74-year-old 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.
“At a time like this, a flag carrier gives the government more leeway,” Deputy Economy Minister Laura Castelli told Italian radio.
“We all saw the difficulties our compatriots faced in returning to Italy. Our decision stems from this.” Transport Minister Paola De Micheli said a “national carrier was strategic for our country” at a time of crisis”.
Alitalia faced the threat of closure even before COVID-19 killed more than 2,100 people in the Mediterranean country and grounded the overwhelming majority of most airlines’ flights.
Market intelligence firm CAPA warned that “most airlines in the world will be bankrupt” by the end of May.
But how Conte’s government intends to save Alitalia — a member of the SkyTeam alliance that has been bleeding money for many years — remains unclear.
The government decree provides for the creation of “a new company wholly controlled by the ministry of economy and finance, or controlled by a company with a majority public stake, including an indirect one”.
Italy’s AGI news agency said the government was also setting up an 600-million-euro fund to deal with the damage the pandemic was causing the aviation sector.
Some of the final details of the national economic rescue programme are expected to be finalised next month.
Alitalia began to flounder with the emergence of budget fliers such as EasyJet and Ryanair in the 1990s.
But analyst believe that it is also too small — and has too many staff for the number of flights it operates — to compete with full-cost rivals.
It flew only 22 million passengers and saw its market share in Italy slip to 14 per cent in 2018.
Lufthansa and the Atlanta-based Delta Airlines each carried around 180 million passengers that year.
Alitalia was privatised by a group of Italian investors for one billion euros in 2008 but went into administration when its staff rejected a proposal to cut jobs in 2017.
It is currently 49-per cent owned by Abu Dhabi-based Etihad Airways and 51-per cent owned by the Italian management team. — AFP