Alitalia Is Losing 2 Million Euros A Day

SkyTeam member and Delta partner Alitalia has been a basket case for years. It’s poorly run, and indeed has largely been run for the benefit of its unions with the help of the Italian government.

One financial backer after another has lost their investment. Air France walked away, and then Etihad came in to subsidize the carrier.

Interestingly, Delta had no problem with these subsidies.

  • Delta had a huge problem with Etihad flying to the U.S. yet no problem with Etihad flying to the U.S. through control of Alitalia.
  • Delta had a huge problem with Emirates flying transatlantic routes like New York – Athens and Milan yet no problem with Gulf carrier supporting Alitalia’s transatlantic routes.
  • They had a huge problem with Qatar-supported Air Italy flying from Italy to the U.S., they had no problem with Alitalia being subsidized.

Copyright: jvdwolf / 123RF Stock Photo

Etihad finally lost its appetite for subsidy. 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 Altialia (so was happy to see a Gulf carrier’s subsidies), would take over management of the airline. So far Delta has been unwilling to do that deal.

Lufthansa has been sniffing around Alitalia. They used to have an Italian subsidiary, Lufthansa Italia, based in Milan from 2009 to 2011.

However the losses are staggering, and there’s little expectation that the Italian government will support change at the airline (or if a current government lent its support, that the next government sure to follow quickly would do so as well).

Indeed the losses have been revealed to be 2 million euros per day.

Alitalia loses as much as 2 million euros ($2 million) a day, Italy’s Industry Minister Stefano Patuanelli said on Thursday, clarifying a comment he had made at a parliamentary committee the day before.

The estimate lays bare the challenge facing the airline’s new temporary administrator, who was been appointed earlier this month to cut costs and find a buyer for Alitalia after a consortium of potential rescuers backtracked.

The government is anxious to find its next victim to take over Alitalia. Who will take the bait?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. The very first thing they need to do is get rid of those lazy-arse flight attendants and the Union that they are a part of. Until this can happen, Alitalia is going to continue to be a basket case.

    If I was a potential investor, until they undertook both these actions, I wouldn’t go near the lazy-arse Italians with a 10 foot barge pole.

    Get a young, good-looking smart Italian crew, under 35 and under 70 kilos, train them properly in 21st century service levels and the customer experience, send them on a “famil” aboard a QR flight, fit them out in fresh new sexy uniforms, smarten up the aircraft interiors, brighten the bastards up, they are so dull, get a Minister in Government who is familiar with airlines and how they work, offer better food and service in Premium throughout flights, not just the first 30 minutes and sell off any aircraft over 15 years old ( alarmingly, that means most of them ).

    Then and only then will this airline start to become a force. If they can’t do all of these basic, public-facing tasks they will remain the mongrel dog of airlines they are. Then it is time to put them out of their misery and shut he bastards down.

    Arrivederci Alitalia and good riddance. Now for TAP Portugal and Aero Mexico. Same horse, different jockey.

  2. Actually, sounds like my past trans Atlantic experiences with Iberia. Nothing like a heavily unionized, over staffed, government protected and red ink consuming carrier based upon a 1960s work environment

    But I think Alitalia would be a better combination for American, as I believe the market would appreciate the point if we bottled all these pathetic carriers together to eliminate any guessing re seat comfort, customer experience, F&B service, etc.

  3. @Sean, then you missed the comment “fit them out in a sexy uniform…” Isnt that the AirFrance secret to profitability?

    Anyway, if AirItalia wants to be profitable, the government needs to give them a monopoly at the Italian airports. And cut off rail service to cities served by AirItalia.
    Seriously, if Alitalia is this inefficient, then Italy needs to look at downsizing them and letting as many low cost carriers as possible bring tourists to Italy for as little as possible, so that tourists will spend their money on hotel, food, etc. Nobody wants to spend their travel budget on the flight, except for, perhaps, Robbo?

  4. Alitalia would be profitable if it has a cobranded credit card with a big bank.

    And btw, Skyteam will soon be “Delta and airlines delta bought”.

  5. Alitalia loses are for pikers! For real losses you should check out Air India whose profitable operations post nationalization is approximately $2 billion. Apart from its standard operating losses things like its art work have a habit of disappearing! The govt has tried to privatize it under terms so onerous they have gotten no bids at all! Luckily the Gov’t claims they will try again and instead of making it impossible to purchase the airline it will be merely very very difficult

  6. If they get some of the management team that turned Fiat around I know the ceo Sergio marchione. Is dead but the are still execs who helped him. Maybe they can turn things around

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