Alitalia became ITA Airways (Italia Trasporto Aereo) after a restructuring aimed at keeping Italy’s national airline afloat.
Before the pandemic Alitalia was losing 2 million euros a day. One financial backer after another has lost their investment. Air France walked away, and then Etihad came in to subsidize the carrier before it, too, lost its shirt.
The Italian government took over funding the carrier, and started looking for a buyer. At one point it looked like Delta, which had had a transatlantic revenue-sharing joint venture with Alitalia, would take over management of the airline. Lufthansa was ultimately selected as winning bidder, but there are now problems with that, too – the purchase contract allowed Lufthansa to pay less based on ITA Airways losses, and the government is not happy they exercised this clause.
Ultimately there wasn’t enough government subsidy and there was never willingness to deal seriously with Alitalia’s labor costs, union work rules, or the way the airline has been a political plaything for powerful interests for decades. In 2017 they filed bankruptcy in New York, days away from being kicked out of New York JFK over unpaid bills and having their U.S. phones turned off.
At the end of the day there was no one to rescue Alitalia but the Italian government. The European Union – which has rules on state aid to private firms – allowed this, but it had to be a separate and arms length new business that was being launched by the Italian state. ITA got a ten-figure injection from the Italian government. But we had to pretend it wasn’t Alitalia anymore.
- The Italian government tried repeatedly to support Alitalia directly, but European Union regulations restricted state subsidies. So Italy had to create a new, “financially independent” airline—hence, ITA was born.
- This also was supposed to let the Italian government start fresh with a leaner, more competitive airline, minimizing Alitalia’s prior liabilities.
- ITA didn’t buy the Alitalia brand outright until later.
So ITA Airways is separate, and Alitalia hasn’t flown in three years. But there are still more than 2,000 employees working for Alitalia, a business that no longer operates. Because Italy.
Not only does Alitalia still exist, but they have 2,059 employees doing god knows what. Well, soon (2025) they may not have any because over 3 years after they ceased flights, they finally appear to be laying off these employees according to notifications to unions.
Is it any wonder that when Bill Clinton became President, Italy and the United States had virtually the same per capita GDP, but now it’s 45% higher in the United States?
Italians are good people , quick to laugh and joke , and warm hearted . Also , good food in Milano .
Reminds me of the conversion of Norwegian’s wide-body 787s to a ‘new’ airline, Norse. However, unlike Alitalia, Norwegian still exists, but it’s just flying 737s on regional European routes these days.
Nothing new for Italy. I remember reading in 1981 about an Italian ski equipment company that had went bankrupt but they were not permitted to go out of business because they needed to still employ their workers and pay their wages. I actually bought a pair of their ski boots after that. Best ski boots I ever had and I kept using them for years until they eventually completely broke down.
@Gary: In 1993 US GDP per capita was 41% higher than Italian GDP per capita. Not close.
However, Italy was screwed by being taken into the Euro currency price-fixing mechanism, US GDP per capita in 2022 was 123% more than Italian GDP per capita.
No one does byzantine bureaucracy better than the Italians! LOL
@ Richard . . . I like it. LOL. I may borrow your comment since using “while the British invented bureaucracy, the Indians perfected it” doesn’t work unless you’ve spent time in India.
I enjoyed many enjoyable lunches and dinners when visiting with execs of Alitalia – usually lasting many hours – all paid for with air ticket contra at the restaurants. A very nice lifestyle was enjoyed by all execs at the old Alitalia – at taxpayer expense. Nostalgia and perhaps jealousy on my part. Lol.