If it is to be the end of the road for Alitalia, they are at least going out in style!

The sorry saga of Alitalia continues to drag on with the new Italian Government now looking at replacing at least one of the airline’s insolvency commissioners, and while it is likely to boost its annual turnover beyond EUR3 billion for FY2018, its future remains far from certain. It is now over a year since the airline first entered insolvency proceedings, but continued delays have stalled the sale process with the deadline now extended until the end of October.


Summary:

  • Alitalia has introduced a new staff uniform for ground and inflight crew created by Italian fashion designer and dressmaker Alberta Ferretti;
  • The Italian flag carrier says the collaboration will “bring prestige to Alitalia,” but has led to suggestions the airline is getting dressed up for its own funeral;
  • While insolvency proceedings have now stretched for more than a year, the airline is now in a much stronger position operationally and financially;
  • Alitalia’s future remains far from certain and while airlines are queuing up to collaborate they are not willing to invest in the business.

But while doubts remain over its future direction, the airline has revealed a new staff uniform for personnel both on the ground and in the air. Unveiled at the start of Milan Men’s Fashion Week the uniforms for ground and inflight crew have been created by Italian fashion designer and dressmaker Alberta Ferretti and “bring prestige to Alitalia,” according to its chief commercial officer, Fabio Maria Lazzerini.

The investment in the new look has not been looked on so favourably by rivals in the industry. Willie Walsh, CEO of Aer Lingus, British Airways, Iberia and Vueling parent IAG described it as “madness” at the CAPA – Centre for  Aviation Airline CEOs in Sydney forum earlier this month.  His comment lead to suggestions that the airline may be getting dressed up for its own funeral.

But, what is certain is that Alitalia is in a much better state of health than it was a year ago when it first entered insolvency. Passenger levels were up +6% year-on-year in 1Q2018 driven mainly by an +7% rise in long haul traffic. This helped boost revenues by +6%. While both Ryanair and Lufthansa Group – both seen as potential investors in the Italian flag carrier – have dismissed any interest in buying the company, they remain interested in developing some form of collaboration with a new owner.

Ryanair chief marketing officer Kenny Jacobs confirms Alitalia today is “already a better company” than a year ago, but notes that the Irish carrier is “still interested in Alitalia, but we do not want to buy it”. Similarly, Carsten Spohr, chairman and CEO of Lufthansa says adopting an investment stance like Etihad Airways had with the business is not an option. “In all modesty we are not Etihad… We are closer to Italy geographically and then we will invest only after the restructuring, as opposed to Etihad who put the money first and then hoped for the restructuring,” he has told the Italian media.

While a solution to the airline’s woes appears some time away, Italy’s FIT-CSIL union has warned that the airline is losing ground on its rivals the longer it takes to finalise its future. Alitalia must be “relaunched… as soon as possible,” says its general secretary Antonio Piras to keep pace with the rate of change and acceleration in the aviation industry. “Other companies such as IAG… are expanding”, he adds.

Mr Piras has suggested a three step plan for Alitalia to reposition itself based around transforming the remainder of the EUR900 million bridge loan into shares, to be sold to major Italian public and private companies; enabling intervention of Italian bank Cassa depositi e prestiti in the company; and adopting the necessary legislative measures for better involvement of pension funds in the capital of Alitalia and the wider Italian transport sector.

Back to the new uniform, which follows just two years since a previous revision and with a reported EUR7 million price tag. Airline officials have been reported as saying it does “not involve any financial disbursement by Alitalia” and certainly brings a new modern twist to the airline’s offer. They even include satin gold buttons engraved with the letter ‘A’, while female jackets are marked at the waist with a gros-gain ribbon in the tricolor of the Italian flag.