Alitalia Will (Not) Be Saved

The airline has been red for more than a year

One of the many things Italians are famous for is Alitalia. However, the airline has been experiencing fiscal problems for about a year and things don’t look rosy today.

The airline has been serving its clinets for half a century, and to me it’s an act close to a crime to let it fade away.It is more than a year ago when I found out that Alitalia was in red more than 1 million euros every day.

This insufficient information got stuck in my head, and whenever I saw news about Alitalia I read them provided that I have enough time to do that.

The only reason why I was interested in this particular case was because Alitalia is a famous European company whose name I could easily remember and whose story could be helpful for me one day by serving me as some kind of association to other less popular but similar cases.

For the last seven days, the Wall Street Journal has been informing their readers about the present and future of Alitalia but the current information in a most concise format could be found here. According to BBC,

It is thought Alitalia is losing about 2m euros every day and effectively declared itself insolvent last month when it sought court protection from its creditors.

It is thought but what if it is true?!? That’s technically more than I thought because when I am told “more than 1 million euros every day” I could think of more than 1 million euros but less than 1.5 million euros. I wouldn’t wonder if things got worse for the last year.

The problem is really great. We are talking about a lot of people working for Alitalia. To some of them the airline might have become part of their life. In the end of last year and the beginning of this year, Air France-KLM was interested in buying the Italian government’s 49.9% stake. Alitalia’s financial burdens have turned Italy’s parliamentary campaigns into plans on how to deal with the problem.

What solution do I see here?I can’t see any solution but what CAI proposes as conditions. The CAI rescue plan includes scale of job losses, terms of work contracts and salary cuts. Each of those conditions are generally not beneficial to Alitalia’s staff no matter whether an employee is going to lose their job or stay.

However, if we assume that Alitalia has been on red for just a year, and if we ignore more complicated calculations, the Italian airline has already lost roughly about 547 500 000 (1.5 million a day) euros. This is a great deal of money and it will grow if no change occurs.BBC points out that the proposed rescue package includes spinning-off profitable short-haul routes into a new business. This is a good idea but, of course, a two-edged sword – it will create new jobs but at the same time those new jobs technically eliminate the old ones.Unfortunately the only problem that keeps CAI from embarking on their proposed rescue plan are the Alitalia unions. They are against CAI’s proposed rescue plan and I cannot justify their reaction.I am absolutely sure that even those unions can see that there is no other possibility but failure. And failure means that everyone of them is losing their job, so instead of trying to preserve at least part of their staff, those unions do harm to themselves.

What will happen if the CAI’s proposed rescue plan is put into action? Those who stay will most likely work harder for less money. I know it is definitely not beneficial but sometimes people have to make sacrifices. Besides, their lower salaries will be increased eventually, so they will not stay permanent.

As to those who will not stay, they will search for a job in another airline. My proposal, and I hope there was such proposal from the Italian government, would be that they be provided with a two- or three-month financial cushion by Rome so that they find a new job without being put under too much stress. Even if they want to work what they have worked so far in Alitalia, there surely are airlines who would be interested in hiring them. Supply and demand influence salaries as well.

Those are the only possibilities that I see would save Alitalia. The only other possibility is failure, as Italian Labor Minister Maurizio Sacconi says.

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3 Comments

Filed under Economy, Life

3 responses to “Alitalia Will (Not) Be Saved

  1. This company will be safev such as Bulgarian – Balkan. With many questions, with many compromises and with rename the companies are awlays saved. So AlItalia will continue to offer a good flights for all people.
    I have user once their places are they are pretty comfortable and the flight was not bad. The atmosphere was good and the difference between them and other companies I have used is large.

  2. I am wondering, however, what the new name will be: Italian Airlines, Air Italia?
    So what you say is their service is better than that of other carriers that you have already used? I heard the same thing but I also heard they usually have delays – pretty much like the Bulgarian airlines.

  3. Хм,согласен с предыдущими высказываниями
    Споки Bye

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