Print from Airliners.net discussion forum
http://www.airliners.net/aviation-forums/general_aviation/read.main/5642657/

Topic: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2012-12-23 12:06:54 and read 39170 times.

Several financial stories out this weekend that Alitalia has yet again run into deep financial troubles.

Ahead of planned January 12 shareholder deadline there is talk the carrier which has accumulated €735mil in losses the last 4-years might need to be either renationalized, or find new investors. Current Alitalia shareholders have not been able to find the cash needed to recapitalize it.

The ongoing economic slump and high oil prices combined with relentless competition in Europe from LCCs and train service has seen the core Alitalia airline operation be loss making. The carrier 2012 loss has been running €150mil more than 2011.

One of the options being considered is asking Air France which has a 25% stake in Alitalia to acquire full control at a heavily discounted price while injecting capital to keep the company afloat.

Multiple stories:
http://en.europeonline-magazine.eu/i...uble-again-report-says_255990.html
http://www.brecorder.com/world/europ...on-verge-of-bankruptcy-report.html
http://www.france24.com/en/20121221-alitalia-verge-bankruptcy-report

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: SInGAPORE_AIR
Posted 2012-12-23 12:17:58 and read 39209 times.

As a person who foolishly allowed himself to be a paying passenger of Alitalia and subsequently experience and witness a shockingly poor standard of service rendered by Alitalia staff in June 2012 I am not surprised and struggle to drum up any sympathy whatsoever.

Never again.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Polot
Posted 2012-12-23 12:21:17 and read 39100 times.

Quoting LAXintl (Thread starter):
One of the options being considered is asking Air France which has a 25% stake in Alitalia to acquire full control at a heavily discounted price while injecting capital to keep the company afloat.

What, exactly, is the benefit for AF/KLM?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: art
Posted 2012-12-23 12:22:51 and read 39076 times.

I hope Air France takes it over on condition that it has a free hand to make the changes necessary to make the business viable. If Berlusconi were to come back, I don't suppose that would be allowed. I think the imminence of an election paralyses everything for a few months.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: jetblueguy22
Posted 2012-12-23 12:43:38 and read 38881 times.

Quoting LAXintl (Thread starter):
One of the options being considered is asking Air France which has a 25% stake in Alitalia to acquire full control at a heavily discounted price while injecting capital to keep the company afloat.

I'm not sure why AF would want to take over Alitalia. Even if they get it at a bargain price they have large losses. Not something to take on when AF is struggling to make money itself.
Blue

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: art
Posted 2012-12-23 13:25:30 and read 38545 times.

Quoting jetblueguy22 (Reply 4):
Quoting LAXintl (Thread starter):
One of the options being considered is asking Air France which has a 25% stake in Alitalia to acquire full control at a heavily discounted price while injecting capital to keep the company afloat.

I'm not sure why AF would want to take over Alitalia. Even if they get it at a bargain price they have large losses. Not something to take on when AF is struggling to make money itself.
Blue

No point in injecting capital to keep it afloat as it is - it will just sink again.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: BMI727
Posted 2012-12-23 13:34:15 and read 38440 times.

Quoting LAXintl (Thread starter):
Alitalia On Verge Of Bankruptcy - Again  

And the winner of "Least Surprising News Item" goes to...

Quoting Polot (Reply 2):
What, exactly, is the benefit for AF/KLM?

Looking at one huge loss on a balance sheet is less depressing than two, maybe?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: OA260
Posted 2012-12-23 13:40:01 and read 38380 times.

Quoting SInGAPORE_AIR (Reply 1):
As a person who foolishly allowed himself to be a paying passenger of Alitalia and subsequently experience and witness a shockingly poor standard of service rendered by Alitalia staff in June 2012 I am not surprised and struggle to drum up any sympathy whatsoever.

Cant disagree there even though it would be a shame to the staff who would loose their jobs. Giving away nearly free tickets has not helped either.   Their IT leaves a lot to the imagination.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aquila3
Posted 2012-12-23 14:05:58 and read 38152 times.

I am not a fan of Alitalia at all, especially since we are paying its failures with our pockets.
II mean our ones, not somebody's else in EU.
Also I would think is normal that a Government would try to keep a strategic asset like a national airline alive whenever possible, of course. The fact that Government would not be the one that other, better, countries would choose for us, I am sorry to say, at the moment it works like this, we have not yet given up our sovereignty to them.
I will dare to say that a weak Italy is even useful for some of our EU "friends".

What surprised me is who got AZ last time.
Colaninno, for what I know, is far to be a friend of the then Prime Minister Berlusconi. He is openly involved in the opposite Left Party, now named PD. If PD wins the next February elections chance is that he will be our Minister for Industry (may God save us).

About assets, once you get rid of all the people you do not need (hope it does not happen) AZ has a quite modern fleet and has some interesting slots and rights, especially the lucrative LIN-FCO route and in MXP. The area around MXP is STILL one of the most productive in EU, with a population and a product comparable to some small rich European Nations. Rome , especially if you put Florence together, on the other hand, STILL has some double-digital percentage of the worlds cultural heritage and that means a lot of leisure traffic that can be pursued.
So whoever will get such assets, could get profit from them. Myself I doubt that AF ( the most probable taker) will, however.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: a36001
Posted 2012-12-23 14:31:13 and read 37959 times.

Would it be better if Alitalia was actually wound up, and a new carrier started with absolutely no connection to the old airline? And I mean no previous management at any level, government or financial connection to the original airline.   Happy Christmas  

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: art
Posted 2012-12-23 14:37:26 and read 37898 times.

Quoting Aquila3 (Reply 8):
Also I would think is normal that a Government would try to keep a strategic asset like a national airline alive whenever possible, of course.

I don't understand. What makes AZ a strategic asset? They provide a service to the economy that other airlines could provide with less risk of the service becoming unavailable due to financial problems preventing the airline from providing the service.

Quoting Aquila3 (Reply 8):
About assets, once you get rid of all the people you do not need (hope it does not happen)

Why do you hope AZ keeps people it does not need? Makes it more likely for AZ to lose money and go bust, doesn't it?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aquila3
Posted 2012-12-23 14:58:41 and read 37720 times.

Quoting art (Reply 10):
I don't understand. What makes AZ a strategic asset? They provide a service to the economy that other airlines could provide with less risk of the service becoming unavailable due to financial problems preventing the airline from providing the service.

Yeah, tell this to our Hungarian friends.
I understand your thinking, but a *WORKING* national carrier is and asset for a Country, especially if your economy is in competition with others that have carriers that are not 100% private.

then:

Quoting art (Reply 10):
About assets, once you get rid of all the people you do not need (hope it does not happen)

Why do you hope AZ keeps people it does not need? Makes it more likely for AZ to lose money and go bust, doesn't it?

Come on! It's Christmas......

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Bill142
Posted 2012-12-23 15:11:30 and read 37610 times.

Quoting Polot (Reply 2):
What, exactly, is the benefit for AF/KLM?

Well they're already broke, so the benefit for AF/KLM would be to hemorrhage even more cash.

Quoting a36001 (Reply 9):

That's the best thing that could happen but it won't. The Italians need to take the same approach as the Hungarians took.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: airbazar
Posted 2012-12-23 15:12:23 and read 37591 times.

Quoting art (Reply 3):
I hope Air France takes it over on condition that it has a free hand to make the changes necessary to make the business viable.

I'm not sure AF is in a position to take over anything considering their own very precarious economic situation. If it wasn't for KLM bailing them out, AF would be even worse than they are.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aquila3
Posted 2012-12-23 15:43:06 and read 37371 times.

Quoting Bill142 (Reply 12):
That's the best thing that could happen but it won't. The Italians need to take the same approach as the Hungarians took.

Are you sure that what happened to Malev was what Hungarians wanted? Or it just happened out of their control?
And I do not think that the result is so good to boast it around, for the business especially.

Coming back to AZ, again, I hate to support them (I come from the MXP area, so I have some reason), but I am trying to be realist. AZ , with his power and connections has burnt almost everything left of the Italian Aviation. Missing AZ we are almost left with FR and U2, worse than Hungary. Not saying that those LCC are bad (indeed I like U2 enough) , but this is a Country that needs a lot more, just have a cold look to the numbers.

Quoting a36001 (Reply 9):

Would it be better if Alitalia was actually wound up, and a new carrier started with absolutely no connection to the old airline? And I mean no previous management at any level, government or financial connection to the original airline.

Also on the practical side, to "fire" all the management (that for what I remember includes a lot of pilots), fire or furlough all the workers in excess, and start from scratch is very difficult in a country highly unionized, where the protection of the workers at the highest level is seen as matter of civilization. It would drive only in a huge stall, and bloody social conflicts. So, as much it looks undesirable or difficult, I believe the best way is still, again, to try to "fix" Alitalia.

[Edited 2012-12-23 15:47:57]

[Edited 2012-12-23 15:49:17]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-23 17:25:05 and read 36378 times.

AZ has to develop FCO the way TK developed IST and KL developed AMS etc. In the domestic market - LCC's are eating up profit margins. There's no future in this business. LH/AF/BA are all immune to this - the domestic/short haul product has to be the cost of feeding a sustainable size of long-haul flights.

It always shocks me to see AZ hasn't fully developed long-haul links. There's no doubt that long-haul transfer traffic, and the Italian market is generally high leisure in characteristic. However that can easily be offset by having smaller premium cabins and higher density on its aircraft. (see KLM model)

AZ should be in markets like Shanghai, Hong Kong, Dubai, Delhi, Jo'burg, Montreal, San Francisco, Washington. If it doesn't pursue this type of strategy, they will be too sensitive to ULCCs, and the variety of other long-haul players eating market share away (i.e. TK/QR/EK etc).

FCO is in a very strategic geographic position - especially as a hub connecting middle east/africa/sub-continent from North America/Europe/South America.

Either AZ makes an effort to become a "global" player - or it's just another airline pursuing a long agonizing decline towards bankruptcy

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Rafabozzolla
Posted 2012-12-23 17:25:07 and read 36387 times.

Politics aside. Italy could have one hell of an airline if business were put first and the entire Rome-hub nonsense was put aside.

A good hub at MXP would be well-located (both geographically and economically) and we're talking about a country of nearly 60M people. Come on, if business is sound, there's a room for a competitive Italian carrier, no comparison with tiny Hungary (all do respect).

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-23 17:30:29 and read 36313 times.

Quoting Rafabozzolla (Reply 16):
A good hub at MXP would be well-located (both geographically and economically) and we're talking about a country of nearly 60M people. Come on, if business is sound, there's a room for a competitive Italian carrier, no comparison with tiny Hungary (all do respect).

This is precisely the problem with the Italian aviation market. Rome is the bigger market - but the majority of the high-yield pax are in MXP which is not such a big market in terms of traffic/volume. Look at the American/Asia majors having difficulty establishing MXP services.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: BMI727
Posted 2012-12-23 17:31:28 and read 36311 times.

Quoting Rafabozzolla (Reply 16):
A good hub at MXP would be well-located (both geographically and economically) and we're talking about a country of nearly 60M people. Come on, if business is sound, there's a room for a competitive Italian carrier,

That's the case for AF/KL buying them. The trick is getting government interference out and cutting costs. If they can get ownership of the major airlines in France, Italy, and the Netherlands and rightsize (read slash dramatically) the whole thing, they could end up with a powerful European airline that can form a triumvirate with Lufthansa and IAG.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: krisyyz
Posted 2012-12-23 17:47:04 and read 36155 times.

Quoting Aquila3 (Reply 14):
Are you sure that what happened to Malev was what Hungarians wanted? Or it just happened out of their control?
And I do not think that the result is so good to boast it around, for the business especially.

Well just look back at the reaction of the Hungarian people after MA folded, the country basically went to into a state of national mourning. The EU's regulations on state funds being used to keep MA alive coupled with leasing companies, airports etc demanding their money was the last straw for MA. Their was a lot of politics involved as well, as I'm sure is the case in Italy. MA was on the road to recovery when they pulled the plug, it could have been saved.


The news stories on AZ don't sound very promising. I read very similar stories about MA a few months before their demise. But what are AZ's options for survival? Obviously but management and labour must take some major cuts, but could AZ survive if they stopped or severely downsized their long-haul ops?

KrisYYZ

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: C010T3
Posted 2012-12-23 18:10:59 and read 35899 times.

Quoting Rafabozzolla (Reply 16):
Politics aside. Italy could have one hell of an airline if business were put first and the entire Rome-hub nonsense was put aside.

A good hub at MXP would be well-located (both geographically and economically) and we're talking about a country of nearly 60M people. Come on, if business is sound, there's a room for a competitive Italian carrier, no comparison with tiny Hungary (all do respect).

MXP is not the solution and it will never be. FCO is not AZ's problem.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: IndianicWorld
Posted 2012-12-23 18:14:55 and read 35848 times.

I hadn't been keeping up with AZ's performance in a while, but I had thought they had done a decent job tryint to turn things around a while back.

The fact that the AZ group of airlines seems to include just about every airline brand in the country, it certainly will be interesting to see what happens if things do end up badly. Will be a large void to fill.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2012-12-23 18:22:10 and read 35770 times.

Quoting C010T3 (Reply 20):

If FCO is not AZ's problem than what is? FCO is poorly located to be a hub, and even though MXP does not have the traffic volume of FCO it can still be profitable by being a hub airport relying on connecting traffic to central and eastern Europe.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-23 18:49:11 and read 35552 times.

Quoting miaintl (Reply 22):
If FCO is not AZ's problem than what is? FCO is poorly located to be a hub, and even though MXP does not have the traffic volume of FCO it can still be profitable by being a hub airport relying on connecting traffic to central and eastern Europe.

How can AZ be effective when the majority of pax destined for Italy want to arrive at FCO. By giving up FCO - it's giving up to the bulk of foreign carriers overflying MXP to land at FCO.

The problem remains that AZ's domestic/short-haul product is bleeding very heavily. AZ needs a larger long-haul fleet / product to compensate for this. It's a race to the bottom. If you're a legacy carrier either you try to compete with the global players - or get swallowed up. There's no reason why AZ is not in Jo'burg, Hong Kong, Shanghai, San Fran, Montreal, Mexico, Dubai. It needs to be in these markets as the good old days of profit on FCO-CTA, FCO-LIN are not around for long.

[Edited 2012-12-23 18:53:34]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2012-12-23 19:11:29 and read 35333 times.

Quoting flyyul (Reply 23):

That's what the situation was back in the old AZ before 2008. Back then MXP got the connecting traffic and FCO got the O&D passengers and it worked well. AZ cannot expand to other long-haul destinations because its short/medium haul feed at FCO is very small. MXP is just the better airport to establish a Legacy carrier that relies on a hub and spoke system.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2012-12-23 19:28:40 and read 36132 times.

AZ being based MXP will never work as long as Milan is split with two competing airports.

People don't want to trek out MXP, when you have LIN right in town.

With key European routes and domestic markets being flown primarily from Linate due to the demand, MXP is left with a much weaker feed network.

This was even brought up as a mayor reason for the last AZ restructuring. At MXP virtually the entire AZ long-haul network was loss making.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: C010T3
Posted 2012-12-23 20:01:51 and read 35748 times.

Quoting miaintl (Reply 22):
If FCO is not AZ's problem than what is? FCO is poorly located to be a hub, and even though MXP does not have the traffic volume of FCO it can still be profitable by being a hub airport relying on connecting traffic to central and eastern Europe.

It's conjuctural! Haven't you observed how almost all European airlines are going through difficulties and some are even being very pro-active in dealing with it, like Iberia and Lufthansa.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: IndianicWorld
Posted 2012-12-23 20:04:50 and read 36352 times.

In many ways, AZ is suffering having 2 important cities in their country who both deserve good service, but can not sustain a dual hub operation.

By ignoring one, you leave the other open for traffic to be lost, but covering both sufficiently would not be a viable option.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-23 20:13:34 and read 36202 times.

Quoting miaintl (Reply 24):
That's what the situation was back in the old AZ before 2008. Back then MXP got the connecting traffic and FCO got the O&D passengers and it worked well. AZ cannot expand to other long-haul destinations because its short/medium haul feed at FCO is very small. MXP is just the better airport to establish a Legacy carrier that relies on a hub and spoke system.

Based on what exactly? The principal problem behind MIL is the fact all domestic/short haul pax go to LIN. MXP becomes a transit traffic only airport for AZ short haul network - which means flights are full in one direction given that the WBs don't sit on the ground for 6-10 hrs during the day & need multiple daily frequencies to feed long-haul banks.

AZ prior to 2008 made huge losses in MXP - bulk of which was the short/mid-haul again due to a lack of national local traffic at the airport.

At FCO - everything is integrated. AZ could build up long-haul services feeding into a single airport satisfying both transit and local boardings. FCO is also better for Italian traffic flowing southbound to Africa/Middle East and South America.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-23 20:17:26 and read 36139 times.

Quoting IndianicWorld (Reply 27):
By ignoring one, you leave the other open for traffic to be lost, but covering both sufficiently would not be a viable option.

It is if each hub has a different focus. If MXP/FCO are fighting for same customers that's where the difficulty begins. At MIL all local short/mid haul pax go to Linate. There's no feed/local mix potential at MXP

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lightsaber
Posted 2012-12-23 20:42:07 and read 35976 times.

Where is the money going to come from to save AZ again? After reading this thread, I am more of the opinion if something major doesn't change, they will just have to shut down.

Quoting krisyyz (Reply 19):
But what are AZ's options for survival? Obviously but management and labour must take some major cuts,

I ask that too. How could AZ become profitable? The changes required are greater than will be socially tolerated. That means a shutdown. Maybe not now, but after the next bankruptcy.

Quoting BMI727 (Reply 6):
And the winner of "Least Surprising News Item" goes to...

Yep. Although I think that news on AR is even less shocking:
AR Hits Record Loss Of U$976M In 2012 (2,7M/day) (by Gonzalo Dec 21 2012 in Civil Aviation)

Quoting Aquila3 (Reply 14):
I believe the best way is still, again, to try to "fix" Alitalia.

How? There must be a draconian solution if it is to work. There is so much opportunity as noted by:

Quoting flyyul (Reply 15):
AZ has to develop FCO the way TK developed IST and KL developed AMS etc. I

I'm going to agree with others that MXP ahs more chance, but only if LIN were to be closed. The first step to saving AZ is ironically closing LIN. Normally I'm pro airport growth, but:

Quoting LAXintl (Reply 25):
AZ being based MXP will never work as long as Milan is split with two competing airports.

   Split hubs never work. There are too many more convenient alternatives today.

Quoting flyyul (Reply 28):
At FCO - everything is integrated. AZ could build up long-haul services feeding into a single airport satisfying both transit and local boardings. FCO is a

Only in that it is one location. A high premium O&D traffic is a far better start to a new hub.

Quoting flyyul (Reply 23):
AZ needs a larger long-haul fleet / product to compensate for this.

I would argue AZ needs to downgauge and introduce more frequency and destinations (787 or A350).

Lightsaber

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-23 20:55:48 and read 35830 times.

Only in that it is one location. A high premium O&D traffic is a far better start to a new hub.

Quoting lightsaber (Reply 30):
Only in that it is one location. A high premium O&D traffic is a far better start to a new hub.

if MXP is so high-premiun - why have most US major reduced their scale in MXP. USAir would flies MXP-PHL/CLT iso of FCO. Emirates flies it's high premium A380 to FCO.

The Italian north is very fragmented. With airports in TRN, BLQ, VRN, PSA, FLR, MXP, LIN, BGY, GOA - there's only one major airports in the Central/South capital region in FCO.

AZ doesn't have a hope in Milan. If LIN closes, MXP still doesn't address the geographic circuitous of pax flying northbound to fly to South America from Italy.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: BMI727
Posted 2012-12-23 21:19:46 and read 35692 times.

Quoting lightsaber (Reply 30):
Split hubs never work. There are too many more convenient alternatives today.

I think AF/KLM should bring Alitalia into the fold and scrap any idea of an international hub in Italy. Cut Alitalia down to a more or less local Italian airline and funnel more traffic via CDG and/or AMS. Obviously, you can't just keep connecting passengers away, but capacity should be dramatically cut and connecting capacity moved out of FCO or MXP.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Byrdluvs747
Posted 2012-12-23 22:40:24 and read 35174 times.

Where is AF or the Italian govt going to get the money to buy out AZ?

Quoting SInGAPORE_AIR (Reply 1):
witness a shockingly poor standard of service rendered by Alitalia staff in June 2012
Quoting OA260 (Reply 7):
it would be a shame to the staff who would loose their jobs.

Why would it be a shame when the employees don't seem too concerned with providing proper customer service? I won't cry for Alitalia.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Rafabozzolla
Posted 2012-12-24 00:21:22 and read 34409 times.

Quoting flyyul (Reply 17):
This is precisely the problem with the Italian aviation market. Rome is the bigger market - but the majority of the high-yield pax are in MXP which is not such a big market in terms of traffic/volume. Look at the American/Asia majors having difficulty establishing MXP services.

Well, I think it is similar to the situation at FRA (in a smaller scale, of course), how much local traffic does it generate? And LH is fine ignoring the leisure traffic in Berlin.

As for the dual airport situation, I agree, that IS a problem. Why didn't Italy close down LIN when MXP was redeveloped (a la Munich)? I think the Italian elite opted for convenience as opposed to a greater strategic planning.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: asctty
Posted 2012-12-24 00:45:00 and read 34209 times.

Many people talk of the importance of keeping a national flag carrier afloat. Unfortunately, AZ is a more of a national embarrassment than a flag bearer. Many people are also concerned about the jobs involved, but AZ owes the money to someone else who's jobs are also at risk. This airline has been a basket case for years, and some of the posts here suggest that they are far behind other European airlines in terms of quality of service. There are other EU 'national' airlines in a similar position, e.g. Iberia, where they are no longer owned by their respective Governments, no longer make any money, yet still are run by management who operate as though they still were Government departments, i.e. over budget, over staffed, union dominated and therefore completely inefficient. The LCCs in Europe have a field day with these ailing airlines hence their long drawn out demise.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Hywel
Posted 2012-12-24 01:25:20 and read 33895 times.

Quoting OA260 (Reply 7):
Giving away nearly free tickets has not helped either.

Haha, I see that you took advantage too! I got LHR-FCO-OTP-LIN-LHR for 2 euros incl. all taxes. Plus a few other trips...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lightsaber
Posted 2012-12-24 01:36:32 and read 33745 times.

Quoting flyyul (Reply 31):
if MXP is so high-premiun - why have most US major reduced their scale in MXP.

Then perhaps Italy has no airport viable as a hub. I believe MXP would be with the inner airport closed (providing far better connecting traffic). Otherwise, Italy has no viable hub city. The premium traffic to FCO is low yield. Now airlines that do J for cheap, e.g., EK will expand.

Quoting BMI727 (Reply 32):
Cut Alitalia down to a more or less local Italian airline and funnel more traffic via CDG and/or AMS.

AZ as a local Italian airline has no value. In that scenario it should just be shut down. It would be cheaper to just fly the passengers on AF/KL metal to the hubs. Intra-Italy traffic is going to the LCCs or trains and nothing is going to stop that.

Note: I think AZ will be 'saved,' but I also think the business case will be practically ignored. Heck, I just went to Alitalia's web site and after a few minutes I went 'screw it, I'll just use Orbitz.' I ended up having to search blogs to find their route map. My end conclusion is that AZ is weak where there is growth, so I don't know how to resurrect them.

Quoting Byrdluvs747 (Reply 33):

Where is AF or the Italian govt going to get the money to buy out AZ?

China or Germany.   

Lightsaber

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: bueb0g
Posted 2012-12-24 02:45:29 and read 33001 times.

Quoting Byrdluvs747 (Reply 33):
Why would it be a shame when the employees don't seem too concerned with providing proper customer service? I won't cry for Alitalia.

And this is based on what? Experiences with a few cabin crew or customer service agents? It's unfair to paint all the employees with the same brush, especially as many of the airline's employees will never have any contact with customers, so the fact that you seem to be implying that it is somehow just for them to lose their jobs is extremely callous.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: IndianicWorld
Posted 2012-12-24 02:59:00 and read 32831 times.

Quoting bueb0g (Reply 38):
And this is based on what? Experiences with a few cabin crew or customer service agents? It's unfair to paint all the employees with the same brush, especially as many of the airline's employees will never have any contact with customers, so the fact that you seem to be implying that it is somehow just for them to lose their jobs is extremely callous.

Speaking from a point of view of an ideal world viewpoint, what you say is true, but in the case of any company, each experience often becomes their opinion on the entire organisation. Its hard to seperate out bits and pieces, moving blame and absolving others of any part in an event which someone has been inconvenienced or unprofessionally treated.

Some would say the ability for bad customer service to continue says a lot about an organisation's ability to manage itself.

The last time I flew AZ was 10 years ago and it was nothing special but it wasn't bad at all, however I have no idea how it is going these days from personal experience.

Overall though, AZ is suffering from a lack of structure in its own country, with so many variables going on which make it hard to really thrive. Politics is never far from anything in business in Italy it seems, which leaves AZ very little room to move.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2012-12-24 03:08:39 and read 32817 times.

Quoting BMI727 (Reply 18):
If they can get ownership of the major airlines in France, Italy, and the Netherlands and rightsize (read slash dramatically) the whole thing, they could end up with a powerful European airline that can form a triumvirate with Lufthansa and IAG.

Woohoo ! Wake up ! This triumvirate already exists and AF/KL is part of it. Passenger traffic : LH/LX/OS group : 90 M / AF/KL group : 75 M / IAG : 50 M. (Source : corporate websites of said groups)...

Quoting airbazar (Reply 13):
If it wasn't for KLM bailing them out, AF would be even worse than they are.

Don't you know better ? KL has grown in recent years through synergies with AF. The Group's financial strategy is to pass the losses in France and the profits in Holland for tax purposes, even if AF/KL, granted, is globally loss-making (after being a cash machine). Much more could be said on this matter but it would be off topic in this thread.


AF currently own 25% of AZ. According to the "fenice" (Phoenix) agreement signed in 2008, AF have the possibility to acquire 100% of AZ between Jan.13 and Oct. 28, 2013 through an exchange of shares with the other AZ shareholders (Benetton, Riva, Banca Intesa,...). The main problem for AF/KL lies in the weakness of their share value at the Paris stock Exchange right now. The group is worth just over one billion euros (the value of 2 A380s...). An exchange of shares would result in giving an exorbitant weight to the Italian companies into the capital of Air France-KLM...

Therefore my guess is that AF/KL will try to gain time in order to buy AZ at a very low price. AF made it clear they would seek profitability in AZ by cutting jobs and by re-sizing the airline. They will keep a small hub at FCO (with only the most profitable intercontinental routes) and use LIN to feed their own hubs of CDG and AMS.

Sad to see such a situation that could have been avoided 5 years ago when AF offered 1,5 billion euros for AZ... But Berlusconi wanted to keep Alitalia italian and this resulted in a loss of time and probably in more inconveniences for both AZ employees and the italian citizens themselves... Should Berlusconi be back next year, I would be more than worried for the future of AZ... They have already merged with Air One, they cannot survive alone, and the prospects of political interference would afraid all reasonable investors...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: PanHAM
Posted 2012-12-24 03:17:23 and read 32692 times.

Not reading all this, the day when any carrier, regardless from which country, should buy a part or the whole of AZ, should be the day when Italian unions as well as politicians become reasonable and responsible social partners.

The funny thing is, that day can exactly be pin-pointed, it'll be the day when pigs can fly.

Till then, the old rule applies : Wanna buy AZ? Betta keepa u hands off.




   

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: r2rho
Posted 2012-12-24 04:25:52 and read 32119 times.

I thought AZ had been doing better after privatisation and merger with Air One...? What's the reason for this now? Who is telling the truth?

In any case, I do see a future for AZ under the following conditions:

- AF/KL buys it for a dirt cheap price, under the condition that the airline be significantly restructured
- The future - no, already the present - of Italian domestic traffic is trains and LCC's. Stay away from that or set up something like IB Express or 4U that can compete on certain routes where air travel is still viable
- A right-sized FCO hub with a KL-type business model (smaller premium cabin, higher density) can work alongside CDG and AMS. MXP cannot work as long as LIN remains open. But LIN can be used to feed CDG / AMS / FCO.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: EricAY05
Posted 2012-12-24 04:28:19 and read 32098 times.

I'm kind of tired of people bashing airlines. For some passengers nothing seems to be good enough. Unfortunately my experience with AZ is very limited, but next year I hope to fly with them a few more times.

My two longhaul flights with AZ were great. One on an old 763 and one on a brand new 332. Service was excellent both ways and the only thing worth complaining about was the lack of AVOD on the 763. Heck, I even got two glasses of water during final descent! (I knew I had to drink something before standing in line for two hours at MIA immigration)

I hope AZ will survive and not merge into AF/KL, since I would much rather fly with them than with AF. At least their planes are clean on the outside  

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: usdcaguy
Posted 2012-12-24 04:30:06 and read 32048 times.

Is AZ held back by a lack of corporate traffic opportunity? Other carriers are based in business centers that are far more important than Rome. Yes, AZ does have some select long-haul flights from MXP, but on the whole, I wonder if a critical mass of business travelers is there to support their cost structure. I'm afraid AZ may be facing a situation similar to OA and IB; their host country is simply not the business player others are despite a few strong industries (clothing, cars, some electronics). Yes, labor relations have often been problematic at AZ, but you really have to look at the demand side of the equation to determine if enough opportunity is present in Italy to be profitable as a carrier based in FCO.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: airbazar
Posted 2012-12-24 05:22:34 and read 31604 times.

Quoting lightsaber (Reply 30):
I ask that too. How could AZ become profitable? The changes required are greater than will be socially tolerated. That means a shutdown. Maybe not now, but after the next bankruptcy.

There is hope for AZ but it requires some political will. Ironically enough, they can look in the mirror and see TAP circa 1995, and follow a similar path if they chose to. They need deep cuts. Any route that doesn't make money has to go. They need to be reborn as a small regional airline, find their niche, and grow from there. There is no other solution.

Quoting Azure (Reply 40):
Sad to see such a situation that could have been avoided 5 years ago when AF offered 1,5 billion euros for AZ... But Berlusconi wanted to keep Alitalia italian and this resulted in a loss of time and probably in more inconveniences for both AZ employees and the italian citizens themselves... Should Berlusconi be back next year, I would be more than worried for the future of AZ... They have already merged with Air One, they cannot survive alone, and the prospects of political interference would afraid all reasonable investors...

  

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: brindabella
Posted 2012-12-24 06:54:59 and read 30853 times.

Quoting SInGAPORE_AIR (Reply 1):
As a person who foolishly allowed himself to be a paying passenger of Alitalia and subsequently experience and witness a shockingly poor standard of service rendered by Alitalia staff in June 2012 I am not surprised and struggle to drum up any sympathy whatsoever.

Never again.
Quoting Aquila3 (Reply 11):
Come on! It's Christmas......

A few years ago my daughter & myself took an AZ flight Cairo-Rome. After a severely abbreviated service, the cabin crew settled-down to some serious partying with the many pax who were also clearly AZ cabin-crew. From there to Rome the rest of the pax were totally ignored; in fact we were obviously in the way!

I mentioned to my daughter that this airline "had the stink of death about it".

Berlusconi shortly thereafter paid a mountain of lira to anyone foolish-enough to take on this shambles of an operation (you couldn't call it an airline). He got that one right!

Two cases:
1) there are many new-hires since the takeover who are in fact hard-working & don't deserve to lose their jobs. For their sake, I hope the airline finds a saviour.
2) the old staff are still there, still poisoning everything they touch; IMO they deserve less than nothing, as they drove AZ into bankruptcy in the first place.

Quoting Aquila3 (Reply 14):
Missing AZ we are almost left with FR and U2, worse than Hungary.

I understand your concern that Italy will be left with not much at all.
However if you look at the rise of say AirAsia (one of many), then it is much more sensible to just support the changes which make it possible for people like Fernandez to create wealth for everyone. AZ is history. Gruesome history.
Unless it has changed an amazing amount, it is still worth less than nothing, Much less.

The last thing the good people of Italy need is to nationalise it again!

(BTW, I'm an Aussie as you can see; but Italy rates as one of my most, most favourite countries. I would live there in a moment. So I'm saying all this not to knock Italy; but more with a sense of anger at the bludgers (another Australian term) who were taking all the good people of Italy for a ride on that Cairo-Rome flight. They were hardly even pretending to work. No wonder the airline went under.)

Carn the Azzuri! (Aussie term again).

cheers Bill

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: rcair1
Posted 2012-12-24 07:11:06 and read 30627 times.

Quoting LAXintl (Thread starter):
Ahead of planned January 12 shareholder deadline there is talk the carrier which has accumulated €735mil in losses the last 4-years might need to be either renationalized, or find new investors.

Or close down.

Quoting Polot (Reply 2):
What, exactly, is the benefit for AF/KLM?

Politicians get to spend more money they do not have, deserve or are entitled to. They get to say they "saved" it. To the customer, public or AF/KLM - none.

Quoting Aquila3 (Reply 8):
lso I would think is normal that a Government would try to keep a strategic asset like a national airline alive whenever possible, of course.

Why? What is strategic about an airline that is failing that happens to have the name of the country painted on it. BTW - When American's show any hint of nationalism - the EU/Europe is quick to condemn. I find it interesting that it is okay for the EU/Europe to be nationalistic.

Quoting Aquila3 (Reply 11):
I understand your thinking, but a *WORKING* national carrier is and asset for a Country,

Again - why. In today's global market - there are few places that benefit from a 'national' carrier regardless. A "national" carrier - which means on that the government supports - would only have value serving places that could not get service otherwise - and Italy is not that.

BTW - I did not support nationalization of the US auto industry either.

Quoting Rafabozzolla (Reply 16):
Politics aside. Italy could have one hell of an airline if business were put first and the entire Rome-hub nonsense was put aside.

History is full of cases that would be different "if this and that". BTW - Italy has several good airlines serving it.

Quoting krisyyz (Reply 19):
went to into a state of national mourning.

And that is a reason to waste money? No - I think not.

Quoting asctty (Reply 35):

Many people talk of the importance of keeping a national flag carrier afloat.

Again - why? Alitalia is just a poorly run airline that is failing.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: SInGAPORE_AIR
Posted 2012-12-24 07:59:51 and read 30222 times.

Having said the above, I plan to take Alitalia to court in Q1 next year. Hopefully they survive long enough to pay me out !

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2012-12-24 08:41:06 and read 29821 times.

Quoting lightsaber (Reply 37):
Then perhaps Italy has no airport viable as a hub. I believe MXP would be with the inner airport closed (providing far better connecting traffic). Otherwise, Italy has no viable hub city. The premium traffic to FCO is low yield. Now airlines that do J for cheap, e.g., EK will expand.

   I think the proper hub opportunity has come and gone for AZ.

Besides the geographic, economic, and demographic issues present with Italy, I think the fact remains that Europe and entire region has plenty of hubs already.

Quoting lightsaber (Reply 37):
AZ as a local Italian airline has no value. In that scenario it should just be shut down. It would be cheaper to just fly the passengers on AF/KL metal to the hubs. Intra-Italy traffic is going to the LCCs or trains and nothing is going to stop that.

I'm not saying AZ should be shut, but to me it certainly should become a very different airline.

Again I'd forget the notion of trying to connect people via a central hub. Instead I'd focus on strictly Italy O&D point-to-point markets. Like SWA in the US, don't have a single base but have multiple ones and offer service on key routes from these Italian cities. For example if Turin has strong demand to London, then connect the two. If Naples can support at Barcelona link, then connect the two.

Same idea for the longhaul game. Maybe only a handful of markets can be profitably sustained at the end, but yes operate these few long hauls from FCO, MXP or anywhere else it makes sense.

Of course this entire concept is reliant on the AZ cost structure being massively overhauled. It needs to become a lean carrier that can sustain competition against LCCs in Europe and to some degree hold its own against trains domestically on trunk routes.

Just my $0.02

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: migair54
Posted 2012-12-24 08:44:47 and read 29780 times.

We usually talk about poor services standards but Cabin crew is only guilty in a small slice of the big cake, if they are like that is because they are allow to be and the main problems are because a very poor management, they are the ones to blame first and then the management of the Cabin crew department for allowing the standards to go down.

But if they are in such a big troubles is not because of few months of losses or bad service, it´s because years of negligence and absolutely stupid decision making.

Also is you ask Italians, I know many that are in the business they can tell you how the government and friends empty Alitalia, waste money and resources and use it to do all kind of stupidities, more or less like many other state owned airlines, many political decision that sink AZ are also to blame.

They really need a whole and deep restructuring but that´s very difficult to do, but if they want to survive in the current environment, everybody has to give up something to find the balance and start again.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2012-12-24 09:07:54 and read 29562 times.

Quoting rcair1 (Reply 47):
Why? What is strategic about an airline that is failing that happens to have the name of the country painted on it.


Besides nationalism, governements may look at a national airline, whether state-owned or public, as a strategic asset for several reasons :
- Socially it is good for employment. Under current EU rules, Italy cannot subsidize AZ . But should they go bankrupt, the state will have to pay for the pensions of the laid-off staff. One more spending any government would like to avoid in the current economical situation...
- And for tax purposes, needless to explain...

In fact, when it comes to political interference into an airline business, it is easy to see nationalism when it is more often a question of jobs and taxes... However I am not saying the italian government should interfere, but rather I would not be surprised if it does !

Besides, I am not sure AF/KL are willing to exercise their right to buy 100% of AZ. But I am sure they do not want to do it now, ie in 2013 (except if their share value continues to increase tremendously during the first semester of 2013). AZ will then have no other option than find another investor, who will probably require a drastic reorganisation of the airline.

But EY, that is not exactly short of cash, might be a possibility. After all they are already quite happy with their acquisition of another european carrier : AB...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: airbazar
Posted 2012-12-24 09:31:06 and read 29150 times.

Quoting rcair1 (Reply 47):
Again - why. In today's global market - there are few places that benefit from a 'national' carrier regardless.

You're not looking at it from an economics point of view but rather from a consumer point of view, and a limited one at that. Althought other airlines can offer trasportation on routes left vacant by a domestic carrier, they will never create the same amount of jobs that a WORKING national carrier would. Foreign carrier would also never fly routes that are marginaly profitable, which a domestic carrier can do by offsetting such routes with more profitable ones. Case in point: LH's domestic network is unprotibale but they continue to operate those. So some consumers would also lose. So the negative domino effect of losing a WORKING national carrier in a country like Italy (4th largest economy in Europe), would be disatrous. That is why it's worth trying to fix Alitalia. Now if it can't be fixed than all bets are off. They're not adding any value.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-24 11:35:07 and read 28021 times.

Quoting LAXintl (Reply 49):
Same idea for the longhaul game. Maybe only a handful of markets can be profitably sustained at the end, but yes operate these few long hauls from FCO, MXP or anywhere else it makes sense.

You're telling me that a country of 60 million people, one of the most touristic regions of the world and still one of the top economies of the world can only support a handful of long-hauls?

Alitalia needs to shrink it's premium cabin size - go higher density and reduce CASM through configuration. The A330-200 was the wrong airplane to order - should have gone with A330-300/B777-300.

The geographic catchment area under FCO is a very impressive - AZ has to forget the domestic/short-haul business and focus on building longhaul links to global markets.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2012-12-24 12:01:36 and read 27791 times.

Quoting flyyul (Reply 53):
You're telling me that a country of 60 million people, one of the most touristic regions of the world and still one of the top economies of the world can only support a handful of long-hauls?

Profitably yes.

AZ as a network carrier cannot survive carrying simply tourist. That is the business of charter carriers, or carriers with lower cost structures. AZ needs routes with good blend of revenue including freight to work in the long term. Chasing tourist or Italian diaspora globally is not a model for success.

As such if you are only looking at O&D flow, that can generate a healthy mix of revenue, I doubt there are more than half a dozen longhaul stations that can be ran successfully flown year-round from Italy by AZ.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lightsaber
Posted 2012-12-24 12:02:29 and read 27761 times.

Quoting brindabella (Reply 46):
AZ is history. Gruesome history.
Unless it has changed an amazing amount, it is still worth less than nothing, Much less.

   Unfortunately that is what must be considered. How is AZ going to create positive value for an investor?

Quoting LAXintl (Reply 49):
I'm not saying AZ should be shut, but to me it certainly should become a very different airline.

I didn't mean to imply you thought AZ should be shut. It is my opinion if AZ doesn't reorganize upon a strong Italian hub that it has negative value going forward. I see no way to save it.

Quoting flyyul (Reply 53):
You're telling me that a country of 60 million people, one of the most touristic regions of the world and still one of the top economies of the world can only support a handful of long-hauls?

Without hubbing, that would be the fact. That would be like myself saying California couldn't support a hub. That could be the case. 60 million isn't much. Not when they are situated to compete with IST, MUC, ZRH, and to a lesser extent CDG, AMS, and FRA.

Quoting flyyul (Reply 53):
Alitalia needs to shrink it's premium cabin size - go higher density and reduce CASM through configuration.

And crew scheduling as well as other details. AZ has volume, but they don't have yield. They need to stop pretending they can offer the same premium service as other airlines when Italy, like Paris, just doesn't have a high RASM premium market. What is AZ doing flying 9 across 777s. Get them to 10 across with the aft "Magnifica" cabin eliminated.

Quoting flyyul (Reply 53):
The A330-200 was the wrong airplane to order

At the time there was A333 range risk. The A332 has a reasonable cabin. I'm not going to trash an airline on what was a reasonable decision at the time.

Quoting Azure (Reply 51):
But EY, that is not exactly short of cash, might be a possibility. After all they are already quite happy with their acquisition of another european carrier : AB...

I think they learned their lesson from AB and will force in a bunch of fine print on AZ that would not be acceptable to the Italian government. Even oil nations need an ROI and right now they are focused on India.

Lightsaber

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-24 12:14:47 and read 27659 times.

Quoting lightsaber (Reply 55):
Without hubbing, that would be the fact. That would be like myself saying California couldn't support a hub. That could be the case. 60 million isn't much. Not when they are situated to compete with IST, MUC, ZRH, and to a lesser extent CDG, AMS, and FRA

Scheduled effectively - one can access all of Eastern Europe, the Mediterranean, Africa, Middle East, Subcontinent - even South east asia via FCO. No other hub other than Paris has access to North Africa/Levant like AZ does via FCO. This is an amazing opportunity.

AZ has a very high fixed cost structure. Naturally the only hedge against this is low-CASM aircraft with higher cabin densities. This is why the A333 would be ideal, B773ER participate in South America/Asia.

My assumption remains long-haul is AZ's only profitable part (and I say profitable very loosely). As a legacy carrier, they've got to focus on building global flows from global markets in order to remain a serious player. Otherwise they will end up like Iberia, Olympic etc.

Management has got to find a way to get into markets like Hong Kong, Delhi, Shanghai, Washington, Montreal. Give up Los Angeles if need be.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: brilondon
Posted 2012-12-24 12:18:09 and read 27624 times.

Quoting a36001 (Reply 9):
Would it be better if Alitalia was actually wound up, and a new carrier started with absolutely no connection to the old airline? And I mean no previous management at any level, government or financial connection to the original airline.   Happy Christmas  

This is what I was thinking.

Quoting Aquila3 (Reply 11):
Come on! It's Christmas......

OK. Wait three months and lose another 30 million Euros and have a nice Christmas.

Quoting Aquila3 (Reply 14):
Are you sure that what happened to Malev was what Hungarians wanted? Or it just happened out of their control?

The did not want it to happen, but it did and Hungary is not imploded on its self. My cousin worked for Malev and she saw what needed to happen and did not mind the government bailing out that airline, oh wait they could not. Same fate for AZ I am afraid.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: BMI727
Posted 2012-12-24 12:39:21 and read 27567 times.

Quoting lightsaber (Reply 37):
AZ as a local Italian airline has no value. In that scenario it should just be shut down.

SN works as a smaller member of Lufthansa group without a major hub for connections. Just cut Alitalia down to the size it needs to be to serve Italy versus trying to have it be a major airline.

Quoting Azure (Reply 40):
This triumvirate already exists and AF/KL is part of it. Passenger traffic : LH/LX/OS group : 90 M / AF/KL group : 75 M / IAG : 50 M. (Source : corporate websites of said groups)...

Snapping up Alitalia would solidify the dividing up of Europe's airlines. So, which player wants Italy?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aquila3
Posted 2012-12-24 12:48:59 and read 27498 times.

Quoting brilondon (Reply 57):
Wait three months and lose another 30 million Euros and have a nice Christmas.

OK, I will risk my part (0.50 Euro).
Have a nice Christmas, in the meantime.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lightsaber
Posted 2012-12-24 16:58:44 and read 26978 times.

Quoting flyyul (Reply 56):
Scheduled effectively - one can access all of Eastern Europe, the Mediterranean, Africa, Middle East, Subcontinent - even South east asia via FCO.

Or expand at MUC. If MUC ever builds another runway (or two), it could serve those markets even better with superior connections. The issue is there is no need for an Italian based hub, in particular once IST is a 5-runway mega-airport. IST, MUC, and FRA will devour whatever part of the market the mid-east carriers do not get to first.

Any why are you mentioning the Subcontinent? AZ isn't a presence there.

Quoting flyyul (Reply 56):
This is an amazing opportunity.

In theory. If engaged before MUC, DXB, or IST acts on it. But they are growing. So I do not see the opportunity lasting very long. The 5-runway airport at IST really kills half the opportunity. The other half would be torched if MUC is ever expanded. Did the mafia pay of their NIMBYs?  
Quoting BMI727 (Reply 58):
Just cut Alitalia down to the size it needs to be to serve Italy versus trying to have it be a major airline.

The issue is the penetration of the LCCs into the Italian market. I do not believe it is a direct comparison because of them.

Quoting BMI727 (Reply 58):
Snapping up Alitalia would solidify the dividing up of Europe's airlines.

I disagree. The LCCs have taken too much of the opportunity.

Quoting flyyul (Reply 56):
AZ has a very high fixed cost structure. Naturally the only hedge against this is low-CASM aircraft with higher cabin densities.

That ends the opportunity. High cost means only high RASM is profitable. That means long haul. AZ needs a better hub to make that work. They could DXB/EK style. But they haven't... and EK as well as TK are better at managing costs. By the time AZ reacts, their competition will have moved on. The only hope I see for AZ is if they were repackaged in a way were LAN could manage them as they wish with a better cost structure. Otherwise, I'm still waiting to see a money making scenario.

Lightsaber

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: ComeAndGo
Posted 2012-12-24 19:13:46 and read 26779 times.

Quoting LAXintl (Reply 25):
People don't want to trek out MXP, when you have LIN right in town.

Thats not true. People were willing to trek out to MXP if the connection would work but like in classic italian fashion it doesn't work. MXP is 50 km from the city. At 200 km/hr the train would be there in 15 minutes. But instead it takes 40 minutes. Because once again the contract for the train connection was given to a "friend" of the then controlling party. And the focus was not to connect the airport as quickly as possible but to earn the most possible cash from the contract. The two airports LIN & MXP could coexist just fine if the ground transportation to the airport was studied right. There's plenty of people who come from the northern area of Milan + Lugano + Como and there's no connection of any kind. There's only a slow train to Milan. The local integration of MXP was never done.

Then the terminal at MXP is totally outdated. It was started in the early '80 and finished in the late '90 with a design that does not factor in post 9/11 security. Processing through MXP can take well over an hour.

What is needed is an airport that is fully integrated in the local community with connections to everywhere and not just milan. A facility that would allow the passenger to fly through the airport in just 20 minutes.

If it takes you 15 min to reach the station where the train leaves to the airport, the train ride were 10 min the total time at the airport 20 min then MXP could very well coexist with LIN. But if everything takes as long as it does today then No it can not.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: airbazar
Posted 2012-12-25 09:00:47 and read 26045 times.

Quoting BMI727 (Reply 58):
SN works as a smaller member of Lufthansa group without a major hub for connections. Just cut Alitalia down to the size it needs to be to serve Italy versus trying to have it be a major airline.

There's some logic to that but your example is flawed. For starters SN has a hub in BRU where it offers both intra-Europe and long haul destinations. Secondly, comparing Italy and Belgium is an apples and oranges comparison. Italy is significantly larger than Belgium, both geographically and economically, and has a sizable manufacturing industry (which Belgium doesn't have), which created intercontinental demand. Also, while AMS and CDG are less than 300Km from Brussels and linked via HSR. Rome is 1000Km from the nearest major hub (MUC), and not linked via HSR to anything outside of Italy. That isolation of Italy and the size of its economy in itself creates demand. The problem of AZ is not lack of demand but rather poor management and unsustainably high operating costs.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Viscount724
Posted 2012-12-25 09:07:33 and read 26052 times.

Quoting flyyul (Reply 15):
FCO is in a very strategic geographic position - especially as a hub connecting middle east/africa/sub-continent from North America/Europe/South America.

FCO is too far south to serve as a good connecting hub for North America and most of Europe. To most points in Asia, connecting at FCO usually means a few hundred more miles of travel compared to AMS/FRA/CDG/ZRH etc.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: PanHAM
Posted 2012-12-25 10:15:12 and read 25930 times.

The music plays in northern Italy for which MUC is indeed the closest and better hub. Most cities in Northern Italy are linked with MUC by LH and mainly Air Dolomiti.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LJ
Posted 2012-12-25 11:48:08 and read 25735 times.

Quoting Azure (Reply 40):
Sad to see such a situation that could have been avoided 5 years ago when AF offered 1,5 billion euros for AZ.

Or 15 years ago in the days of the KL - AZ joint venture.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: PlymSpotter
Posted 2012-12-25 12:11:14 and read 25664 times.

What are their options likely to be? I have a number of flights with them in the first quarter of 2013, so impending bankruptcy is a bit worrying!


Dan  

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Semaex
Posted 2012-12-25 13:01:02 and read 25538 times.

Quoting flyyul (Reply 15):
LH/AF/BA are all immune to this - the domestic/short haul product has to be the cost of feeding a sustainable size of long-haul flights.

  
Either that or just accept that Italy has been left out of the European race to longhaul. MAD/LHR, CDG/AMS, FRA/ZRH. No space for MXP/FCO I'm afraid...

Quoting BMI727 (Reply 32):
I think AF/KLM should bring Alitalia into the fold and scrap any idea of an international hub in Italy. Cut Alitalia down to a more or less local Italian airline and funnel more traffic via CDG and/or AMS. Obviously, you can't just keep connecting passengers away, but capacity should be dramatically cut and connecting capacity moved out of FCO or MXP.

The problem with this situation is, that longhaul traffic ex Italy via AF/KL can only work westbound. The Gulf Airlines would take the whole market east and maybe south of Europe and the unions know it. They would never support such a situation.

Quoting Aquila3 (Reply 14):
Missing AZ we are almost left with FR and U2, worse than Hungary. Not saying that those LCC are bad (indeed I like U2 enough) , but this is a Country that needs a lot more, just have a cold look to the numbers.

I'm not seeing such a dark future for Italy. More than 60 posts until I see EN dropping in this thread. Quite a surprise to me.

Let me paint the following scenario: Let AZ go bust and wait for EN to take over the market. EN is strictly speaking a LH- and thus german-owned airline, but it has enough marketshare in northern Italy to be able to make it in the south too. Let EN expand and take over some ground- and aircrew of the formerly great AZ. They are already feeding MUC and could expand to feeding ZRH as well, possibly even start up selected longhaul ex Rome.
It may be the only solution to give such a highly industrialized nation like Italy the the top end airline that it deserves and that U2 and FR can not provide.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lollomz
Posted 2012-12-25 16:24:53 and read 25193 times.

I really hope we (italians) will not pay a second time for the management errors..... time will tell about AZ.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: BMI727
Posted 2012-12-25 17:21:51 and read 25120 times.

Quoting lollomz (Reply 68):
I really hope we (italians) will not pay a second time for the management errors.....

That may not be an option for Italians. Germany, on the other hand, might be on the hook.   

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: FlyingSicilian
Posted 2012-12-25 19:18:20 and read 24945 times.

How can they still be tanking that bad domestically? With Windjet killed off they have much more of the market to themselves and prices from the south are not cheap...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aquila3
Posted 2012-12-26 01:10:11 and read 24721 times.

Quoting BMI727 (Reply 69):
Germany, on the other hand, might be on the hook.   

Care to elaborate?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2012-12-26 07:02:29 and read 24364 times.

Quoting Semaex (Reply 67):
The problem with this situation is, that longhaul traffic ex Italy via AF/KL can only work westbound. The Gulf Airlines would take the whole market east and maybe south of Europe and the unions know it. They would never support such a situation.

An entry of EY in the capital of AZ cannot be ruled out at this stage : AF/KL currently own 25% of AZ and AF/KL want (need ?) to intensify their partnership with EY... This would provide the necessary cash for AZ's growth, under the condition of a restructuration of the airline. The unions may well have no other option to accept if they want their airline to survive.

Quoting Semaex (Reply 67):
just accept that Italy has been left out of the European race to longhaul. MAD/LHR, CDG/AMS, FRA/ZRH. No space for MXP/FCO I'm afraid...

I would not be that affirmative. AZ have some potential on long-haul : the italian "diaspora" in North and South America, the internationalization of the Italian economy, the huge cultural attractivity, and last but not least, the propensity of the rich italians to travel far away from home during their vacation. AZ can be present on routes that would not sustain a high yield traffic provided they duplicate a, say, KLM type of business model...

Quoting Aquila3 (Reply 71):
Quoting BMI727 (Reply 69):
Germany, on the other hand, might be on the hook.   

Care to elaborate?

I too would be interested to learn more on this !

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lightsaber
Posted 2012-12-26 08:27:22 and read 24164 times.

Quoting ComeAndGo (Reply 61):
The two airports LIN & MXP could coexist just fine if the ground transportation to the airport was studied right.

   Split hubs always result in the close in airport being preferred for short flights and thus 'robbing' the outer airport of connections. Eventually Milan will grow enough to fill out MXP better. But without connections, most long haul flights are not viable (few fill adequately P2P due to the size of widebodies and declining demand with distance).

Quoting Semaex (Reply 67):
The problem with this situation is, that longhaul traffic ex Italy via AF/KL can only work westbound. The Gulf Airlines would take the whole market east and maybe south of Europe and the unions know it.

Look at AZ's route map. The growth to the east has mostly been Gulf carriers. The window of opportunity is closing.

Quoting Azure (Reply 72):
AZ can be present on routes that would not sustain a high yield traffic provided they duplicate a, say, KLM type of business model...

But will they? High utilization, low CASM, low premium cabin, and setting up flights on demand and not prestige. Any politicking and many of those routes will have their demand met by other carriers (e.g,. LAN with their 788s). AZ must get down their costs so they can be nimble enough to have the 'first movers advantage.'

Lightsaber

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-26 14:18:39 and read 23730 times.

Quoting lightsaber (Reply 60):
Or expand at MUC. If MUC ever builds another runway (or two), it could serve those markets even better with superior connections. The issue is there is no need for an Italian based hub, in particular once IST is a 5-runway mega-airport. IST, MUC, and FRA will devour whatever part of the market the mid-east carriers do not get to first.

Any why are you mentioning the Subcontinent? AZ isn't a presence there.

FCO is in a very strategic geographic location to build flows from Middle East / Subcontinent via FCO to Europe/North America. Couple this - with very strong demand for leisure/capital traffic to Rome, this becomes a compelling opportunity.

The issue again is unit cost. AZ has very high fixed costs - and needs a variable operating hedge against this cost base. Alitalia has downscale and become KLM (high density cabins). There's no room for AZ to become LH. AZ needs A333s/B77Ws with the highest possible density connecting to a very basic short/mid-haul network in FCO.

This is immensely strategic for Italy. The country needs an airline to focus on developing the local market and forging economic relationships with global markets. There's countless evidence of the tremendous benefits air service bring to economies - and who will want to build a global hub in Italy other than AZ?

Remember that from an OAL perspective, there's more presence from foreign carriers in Rome than Milan (despite the claims that MXP is this so called high yield area of endless premium traffic).

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: MillwallSean
Posted 2012-12-26 17:37:04 and read 23486 times.

Quoting flyyul (Reply 74):
FCO is in a very strategic geographic location to build flows from Middle East / Subcontinent via FCO to Europe/North America. Couple this - with very strong demand for leisure/capital traffic to Rome, this becomes a compelling opportunity.

I fail to see how FCO is in a good position for this?
Who would connect in FCO when going between the middle east and Europe? Its a pretty decent detour for most passengers.
Same with those going to North America, a connection in FCO doesn't reduce travel time at all so where is the competitive edge?
Add on that the middle east is already more than fully served by carriers no European airline can compete with due to lower costs and the idea of connecting passengers from those regions to North America and Europe becomes less interesting.

Connecting traffic from north America doesnt make any sense either since your passengers would have to backtrack to virtually all of Europe and definitely all important business destinations by landing at FCO.

FCO has a good location for traffic going north/South. But not for traffic going east/west.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Viscount724
Posted 2012-12-26 17:43:47 and read 23490 times.

Quoting flyyul (Reply 74):
FCO is in a very strategic geographic location to build flows from Middle East / Subcontinent via FCO to Europe/North America.

As already mentioned in my Reply 63, FCO is too far south to be a logical connecting point for most of those markets. FCO's reputation as a convenient connecting hub is also poor and no competition for points like AMS/CDG/FRA/MUC/ZRH or even LHR in quality of service.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-26 20:32:48 and read 23700 times.

Quoting Viscount724 (Reply 76):
As already mentioned in my Reply 63, FCO is too far south to be a logical connecting point for most of those markets. FCO's reputation as a convenient connecting hub is also poor and no competition for points like AMS/CDG/FRA/MUC/ZRH or even LHR in quality of service.

Based on what? Consult AZ's traffic numbers for their intercont services - a strong portion connects to the Middle East, Eastern Europe, Southern Italy and North Africa. FCO is a wonderful geographic location to exploit this whole market - and with all due respect - in as good or better than MUC to connect this part of the world.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: baw716
Posted 2012-12-26 21:42:59 and read 23733 times.

Quoting Rafabozzolla (Reply 16):
Politics aside. Italy could have one hell of an airline if business were put first and the entire Rome-hub nonsense was put aside.

A good hub at MXP would be well-located (both geographically and economically) and we're talking about a country of nearly 60M people. Come on, if business is sound, there's a room for a competitive Italian carrier, no comparison with tiny Hungary (all do respect).

As an ex-Alitalia manager who operated SFO-MXP (quite successfully prior to 9/11), I have some strong feelings on this subject. Rafabozzolla is absolutely correct. Alitalia would be a vastly better performer if it focused its core business markets with a well developed hub at Malpensa and run higher density/lower yielding traffic point to point into Rome.

The move to Rome was not taken favorably by the business market and this has hurt AZ. The other issue that is a bigger challenge for AZ is the fact that it is Italian. They are the most wonderful people in the world. They can also get pretty ugly when they get their back pressed to the wall. It is the fact that AZ is fundamentally flawed. It's also the reason I still love them...even as frustrating as they can get... It's disappointing to hear that they are not doing well, but it is also not a big surprise.

baw716

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2012-12-27 10:10:10 and read 23062 times.

Saw story that suggest AZ should be exploring tie up with with Air France and Etihad.

AZ would basically become a intra-European airline with focus on feedings CDG from throughout Italy for longhauls headed to the Americas, and feed Abu Dhabi from points in Italy for traffic headed East.

Domestically AZ faces a shrinking world that sees formerly golden routes such as Milan-Rome where the local market will be taken over by the train similar to what happened in Spain where MAD-BCN air travel volume today is fraction of volume before the train.

AZ would also continue its experiment by using more lower cost contract carriers - for example Tarom was operating ATR segment on Rome-Pisa for AZ. This would be expanded to bringing in another 10-15 ATRs to serve secondary markets where LCCs don't exist and also better sizing its overall domestic network capacity.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Viscount724
Posted 2012-12-27 12:22:27 and read 22812 times.

Quoting flyyul (Reply 77):
Quoting Viscount724 (Reply 76):
As already mentioned in my Reply 63, FCO is too far south to be a logical connecting point for most of those markets. FCO's reputation as a convenient connecting hub is also poor and no competition for points like AMS/CDG/FRA/MUC/ZRH or even LHR in quality of service.

Based on what? Consult AZ's traffic numbers for their intercont services - a strong portion connects to the Middle East, Eastern Europe, Southern Italy and North Africa. FCO is a wonderful geographic location to exploit this whole market -

I was referring specifically to your statement that FCO is a good connecting hub for North America and Europe to the Middle East and Asia. Can you give a few examples of O&Ds between North America and those regions where a connection via FCO is the shortest and fastest? I expect whatever success AZ is having in selling connecting traffic is due to price and little else.

In my experience, Italy is also more prone to strikes and similar disruptions which would deter me from booking an AZ connection.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-27 13:32:00 and read 22705 times.

FCO is a fantastic hub for traffic to the Balkans, Greece, Turkey, Egypt, Tunisia, Lebanon, Israel, Iran etc.

AZ is one of top producers on ODs such as YYZ-CAI, YYZ-OTP, YYZ-TLV, YYZ-BEG, YYZ-TIA, YYZ-ATH/SKG, YYZ-IST

Again - if exploited properly - in a wonderful location to be a differentiated hub. I agree that FCO is not a very good hub for Western Europe flows from the Americas.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2012-12-27 14:11:59 and read 22630 times.

Quoting flyyul (Reply 81):
AZ is one of top producers on ODs such as YYZ-CAI, YYZ-OTP, YYZ-TLV, YYZ-BEG, YYZ-TIA, YYZ-ATH/SKG, YYZ-IST

Funny you give the examples you do, as I was recently reviewing this.

Here are some AZ markets shares from YYZ based on O&D.

TIA - 30.4% (AZ happen to be #1 carrier)
SKG - 22.3% (LH is #1)
AMM - 7.1%
CAI - 5.9%
ATH - 5.2%

The rest of cities you cited, AZ market share is inconsequential.

But at the end of the day what does AZ really bring to the market that is new? Whats unique about a Rome or Milan hub network? I don't think anything.

Its not like AZ can provide unique markets that other carriers are not already serving well in a crowded European hub landscape. This mean AZ must rely on buying market share with low fares. Not a good recipe for an already high cost airline.

To me the European hub game is already very crowded, and AZ missed the bus a long time ago about cementing its place as a respectable hub position on the continent.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Polot
Posted 2012-12-27 14:27:40 and read 22577 times.

Quoting flyyul (Reply 81):
FCO is a fantastic hub for traffic to the Balkans, Greece, Turkey, Egypt, Tunisia, Lebanon, Israel, Iran etc.

AZ is one of top producers on ODs such as YYZ-CAI, YYZ-OTP, YYZ-TLV, YYZ-BEG, YYZ-TIA, YYZ-ATH/SKG, YYZ-IST

Out of all those pairs, FCO is in a better location than FRA in exactly one: YYZ-CAI (by a mere 12 mi). Granted for most of those routes FRA's advantage over FCO's is negligible (just as FCO's over FRA's on YYZ-CAI is) but FRA is already a strong hub due to LH. As is KL in AMS. As is AF in CDG. As is BA in LHR.

What advantage does AZ have that will help it break through and be different? They don't have a significant geographic advantage with FCO (in most cases it is so far south that it is at a slight disadvantage). They certainly don't have a service advantage.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2012-12-27 15:14:14 and read 22484 times.

Quoting LAXintl (Reply 82):
Here are some AZ markets shares from YYZ based on O&D.

TIA - 30.4% (AZ happen to be #1 carrier)
SKG - 22.3% (LH is #1)
AMM - 7.1%
CAI - 5.9%
ATH - 5.2%

The rest of cities you cited, AZ market share is inconsequential.

But at the end of the day what does AZ really bring to the market that is new? Whats unique about a Rome or Milan hub network? I don't think anything.

Its not like AZ can provide unique markets that other carriers are not already serving well in a crowded European hub landscape. This mean AZ must rely on buying market share with low fares. Not a good recipe for an already high cost airline.

To me the European hub game is already very crowded, and AZ missed the bus a long time ago about cementing its place as a respectable hub position on the continent.

BA/LX/LH out of MUC don't participate much in this market. In fact it's TK/AZ/AF and a little of LH FRA that participates in the Levant/Mediterranean market. The fact that AZ is sitting on a huge and desirable market in Italy, coupled with favorable geographic positioning gives them a key to long-haul growth. Issue being FCO is a mess, their planes don't have the proper density, and management seems to be running in circles.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2012-12-28 09:51:02 and read 21917 times.

Here is a story (which AZ is denying) involving state railway company investing in Alitalia as part of a partnership with Air France.

Alitalia denies tie-up talk with Italy state railway
http://www.reuters.com/article/2012/...-alitalia-fs-idUSLNE8BR00I20121228

I suppose an investment by Ferrovie dello Stato is a backdoor way for the Italian state to get back into AZ and provide funding.

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lollomz
Posted 2012-12-28 12:41:08 and read 21636 times.

Quoting LAXintl (Reply 85):

In this case, once again, italians will pay the bill..... sad, really sad.......

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-06 11:09:35 and read 20354 times.

News out today that AF/KL are in advance talks tom exercise their option to acquire remaining shares in AZ.

Apparently AF/KL has offered current shareholders a 20% premium on their shares.

Story:
http://www.reuters.com/article/2013/...nce-alitalia-idUSBRE90503L20130106

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lightsaber
Posted 2013-01-06 12:56:43 and read 20144 times.

Quoting flyyul (Reply 74):
The issue again is unit cost. AZ has very high fixed costs

Costs are the issue, including airport efficiency. MUC, if it ever adds runways and a 2nd terminal, would eliminate the need to hub in Italy for long haul. It isn't that FCO doesn't have tremendous opportunity. The issue is that aircraft are becoming more efficient at range.

The example is the secondary hubs in the United states. As aircraft range and 'connecting prejudices' changed, only the more efficient or those attached to strong O&D markets thrived. Perhaps a better example is Mirabel.

Quoting flyyul (Reply 74):
FCO is in a very strategic geographic location to build flows from Middle East / Subcontinent via FCO to Europe/North America. Couple this - with very strong demand for leisure/capital traffic to Rome, this becomes a compelling opportunity.

Ok... now they must make the most of it. As noted:

Quoting LAXintl (Reply 82):
But at the end of the day what does AZ really bring to the market that is new? Whats unique about a Rome or Milan hub network? I don't think anything.

There are enough other hubs strategically located: IST, ZRH, and MUC being the three MXP and FCO are wedged between and throw CDG and the mid-east hubs in their too. What do they provide that cannot be met at the other hubs?

I did this post a while ago (unfortunately Google has changed their search to sell tickets and I cannot repeat for all the airports today):
Airports With Greatest Number Of Connected Cities (by lightsaber May 14 2012 in Aviation Polls)

FCO was a respectable #15 on the list connected to 155 cities. But that is less than MUC 184 and IST 185 and not in the 200+ league of the top European hubs (FRA, AMS, and CDG).

Note: If I do the analysis today, FCO is down to 141 connected cities (but FRA is down to 222, so its probably regional or seasonal).

Quoting LAXintl (Reply 82):
To me the European hub game is already very crowded, and AZ missed the bus a long time ago about cementing its place as a respectable hub position on the continent.

They missed the bus, but there is room to grow. But that requires reform that just isn't happening.

Lightsaber

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-01-06 13:13:29 and read 20071 times.

Typically want to put a hub where there's strong demand for the surrounding region, decent premium traffic, and a reasonable geographic catchment area

1.) Rome and surrounding region is an extremely attractive part of the world with significant leisure demand but yet marginal premium demand

2.) Paris's niche is again being the only major gateway in France, and providing excellent lift to French Africa/Middle East.

3.) Legacy carriers are turning away from competing in the domestic market. Alitalia has Air One and should shift most of its shorthaul to this entity. Alitalia has to focus on lowering its cost through improved seating density on its airplanes (i.e. KLM/Air France model). It should have better links to global markets across the world. Even if AZ is not in the same concert as EK/TK/AF/BA/LH etc - there's reasonable demand to Italy and surrounding region to build an effective hub.

KL built AMS with a much smaller local market. They did it by having dense config, a down-scaled premium product, and focusing on the 6th freedom market. They have Heathrow, Paris, Frankfurt surrounding them. KL today is notoriously one of the cheapest carrier because they have low(er) variable CASM by having dense cabins. They attract traffic through AMS by simply having a low(er) price point. BA/LH focus more on the premium market hence why we see huge F/C cabins on these operators... KL exploited their niche perfectly.

AZ has to adopt this model. Their 281 seater A330-200 (ex Air One machines) are a great example of the type of strategy AZ needs to follow. The 777-200ER are finally getting 10 abreast but I would argue has too many premium seats. The A330-200 is a good airplane, but the A330-300 with better density would suit AZ for the bulk of its market which is 8-10 hr flying ex FCO to North America.

Fiumicino has to improve. Massive investment is needed in terms of terminal and connectivity - there's no doubt about it. But Malpensa/Linate aren't much better.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Viscount724
Posted 2013-01-06 13:14:29 and read 20088 times.

Quoting lightsaber (Reply 88):
MUC, if it ever adds runways and a 2nd terminal,

Do you mean 3rd terminal? MUC already has 2 terminals. LH and Star Alliance carriers use T2 which opened in 2003. Everyone else uses the original T1 that opened with the airport in 1992.

[Edited 2013-01-06 13:15:26]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-06 14:43:08 and read 19901 times.

Future of AZ becoming an issue in the upcoming elections.

Mr Berlusconi says he would oppose a AF take over -- more specifically he says
"If Alitalia fell into the hands of the French, and I know the French well, many tourists would sooner be visiting the châteaux of the Loire than our artistic treasures,”

While Mr Monti on the other hand says AZ future needs to be viewed in the bigger Italian industrial context and one should avoid “abstract or dogmatic positions”

Story:
http://www.ft.com/cms/s/0/2cc04ba4-5...97-00144feab49a.html#axzz2HEksjFye

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-01-06 18:38:19 and read 19724 times.

Congrats Nonno Berlusconi. The French really prevented KLM from growing into markets like Calgary, Chengdu, Huangzhou, Xiamen, Fukuoka, Lima. AF/KL integration is just what AZ needs.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: mercure1
Posted 2013-01-07 08:48:18 and read 19273 times.

What a headache.

Already troubled AF considers more challenges before it manages even to figure out how cleaning up its own financial mess.

I'm not sure you can solve problems by joining two very challenged economic enterprises and social cultures.

Can only hope KLM can earn enough profits to cover their French and Italian cousin losses if this becomes the case.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-07 16:16:57 and read 19116 times.

Ha ha, match made in heaven.

I can see good synergy between AF and AZ, however I tend to agree things might be very messy under a single umbrella with the Dutch left to watch the circus.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aesma
Posted 2013-01-07 17:32:24 and read 19022 times.

IIRC Alitalia was already in the same position during the last Italian elections, with Berlusconi saying he would find backers for the airline...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: art
Posted 2013-01-08 01:18:53 and read 18870 times.

Reported in UK that Berlusconi is not seeking to be prime minister. IMO that reduces the risk of proposals to restructure Alitalia being blocked.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-01-08 03:52:07 and read 18734 times.

The scenario I imagined in my reply 72 seems to be more and more likely : according to the French Newspaper "Les Echos", EY would "help" AF to take control of AZ : "Air France-KLM, which owns 25% of the Italian company but does not have the means to buy the rest, would avoid the risk that a stake in Alitalia goes to hostile hands ... Waiting to be sufficiently recovered to be able to make a bid, in cash or by exchanging shares in 2014 or 2015"

http://www.lesechos.fr/entreprises-s...ce-klm-au-tour-de-table-526214.php

Quoting Aesma (Reply 95):
IIRC Alitalia was already in the same position during the last Italian elections, with Berlusconi saying he would find backers for the airline...

Correct, but I doubt Berlusconi, even if he wins the election in late February, will be able once again to block the sale of AZ to foreign investors. The Italian shareholders of AZ seem to be looking forward to selling their shares...

Quoting LAXintl (Reply 94):
I can see good synergy between AF and AZ, however I tend to agree things might be very messy under a single umbrella with the Dutch left to watch the circus.

You should be reminded that Air France KLM is a fully integrated company. The CEO of the holding company is French, the headquarters are in Paris, but the VP and many other members of the board are Dutch . AFKL would not be able to buy AZ if the "dutch" as you say would not agree on the strategy.
IMHO the brand KLM will benefit from an integration of AZ into the AFKL group...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-14 14:14:48 and read 17959 times.

Sounds like the outgoing Italian government strongly encourage a closer AZ linkup with AF.

Corrado Passera, the Minister of Industry says "Italy has a great opportunity with Air France. Would be a shame to spoil it"

Story:
http://fr.reuters.com/article/frEuroRpt/idFRL6N0AJ6B620130114

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-21 21:29:15 and read 17057 times.

To help raise money and allow stockholders to defer need to recapitalize, AZ board has approved plans to spin-off the Mille Miglia program with valuation set about €250mil.

Story:
http://www.repubblica.it/economia/fi...er_i_conti_dell_alitalia-51019714/

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-01-23 03:11:34 and read 16397 times.

Quoting LAXintl (Reply 99):
To help raise money and allow stockholders to defer need to recapitalize, AZ board has approved plans to spin-off the Mille Miglia program with valuation set about €250mil.

I wonder if, once this spin-off is done, AF/KL could buy the Mille Miglia program and merge it with Flying Blue. There is a rather "strange" article on AF 's corporate site emphazing all the benefits of the AZ / AF/KL cooperation. Nothing is free in the PR world and I thought that somehow AF was grounding such an integration (both for internal and public purposes).
http://corporate.airfrance.com/en/pr...p-at-the-service-of-our-customers/

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: r2rho
Posted 2013-01-23 04:04:36 and read 16310 times.

Quoting Azure (Reply 100):
To help raise money and allow stockholders to defer need to recapitalize, AZ board has approved plans to spin-off the Mille Miglia program with valuation set about €250mil.

I wonder if, once this spin-off is done, AF/KL could buy the Mille Miglia program and merge it with Flying Blue.

That is in fact quite likely. It is exactly the same move as AB has just done by selling its FF program to EY - effectively getting an additional cash injection by its main shareholder.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Wisdom
Posted 2013-01-23 04:13:07 and read 16671 times.

Who is going to pay 250 millions for a mileage program?

I said it a long time ago, AZ's biggest mistake was to position its hub at FCO.
Most of the flow of AZ flights is North-bound.

Those 500 additional kilometers they waste on each flight by hubbing at FCO over Milano will kill them in the long run.

If they want to survive, they need to re-position the hub to Milano and at best only operate a lighter "AZ express" hub at FCO.

By Milano, I don't mean Malpensa, but Linate. Ideally, the government should kill MXP and expand LIN into a mega hub. There's plenty of open farm land to the East of the airport, I don't see why the heck people should travel all the way to MXP for a flight.

[Edited 2013-01-23 04:16:14]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-01-23 05:33:47 and read 16478 times.

Quoting Wisdom (Reply 102):
Who is going to pay 250 millions for a mileage program?

EY just paied 200 millions € for Air Berlin's Topbonus...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-01-23 05:35:18 and read 16499 times.

Quoting Wisdom (Reply 102):
Who is going to pay 250 millions for a mileage program?

I said it a long time ago, AZ's biggest mistake was to position its hub at FCO.
Most of the flow of AZ flights is North-bound.

Those 500 additional kilometers they waste on each flight by hubbing at FCO over Milano will kill them in the long run.

If they want to survive, they need to re-position the hub to Milano and at best only operate a lighter "AZ express" hub at FCO.

By Milano, I don't mean Malpensa, but Linate. Ideally, the government should kill MXP and expand LIN into a mega hub. There's plenty of open farm land to the East of the airport, I don't see why the heck people should travel all the way to MXP for a flight.

Nonsense. Where do you get your numbers? A small portion of Milano traffic transits to FCO with the exception of the South America flights.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Wisdom
Posted 2013-01-23 07:49:21 and read 16234 times.

Nonsense yourself.
I suggest that you take a good read at my post before you comment next time.

If you look at the flows of AZ mainline flights originating in FCO, their flight path is mostly North-bound.
Taking a hub 500km closer to most of your destinations is not nonsense, it's common sense.

The AZ hub in FCO instead of Milano, is like LH having a hub in Berlin instead of FRA.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-01-23 08:04:41 and read 16192 times.

Quoting Wisdom (Reply 105):
The AZ hub in FCO instead of Milano, is like LH having a hub in Berlin instead of FRA

Your claim again has no substance. There's more desire by foreign carriers to be at FCO than MXP. Rome is the bigger market.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Wisdom
Posted 2013-01-23 08:31:00 and read 16125 times.

Quoting flyyul (Reply 106):
Your claim again has no substance. There's more desire by foreign carriers to be at FCO than MXP. Rome is the bigger market.

You are funny.

AZ should definitely not define their hub by the desire of foreign competing airlines.
Rome is the bigger market in your dreams. Milan is and has always been the largest O&D market for Italy, together with the rest of Northern Italy.

Rome is now the biggest market because of transfer traffic, but O&D is way below Milan and Northern Italy.

MXP is an inconveniently located, sh*tty airport.
If Aeroporti di Milano can expand LIN into a hub airport, there would be no reason for AZ to continue operating their mega hub out of FCO.

This doesn't make sense, that doesn't make sense, you don't make sense.

The numbers are here:
LIN-ORD: 7326km FCO-ORD: 7762km FCO= +436km
LIN-LHR: 983km FCO-LHR: 1446km FCO= +483km
LIN-FRA: 512km FCO-FRA: 958km FCO= +446km

It's all good if you want to run a O&D operation in Rome, but the point of a hub is to make a good chunk of your money out of transfer traffic, be it short-haul or long-haul it doesn't matter. Hence Milan is much better placed to serve as a hub than FCO.



[Edited 2013-01-23 08:36:45]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-01-23 12:52:24 and read 15899 times.

Quoting Wisdom (Reply 107):
Rome is now the biggest market because of transfer traffic, but O&D is way below Milan and Northern Italy.

MXP is an inconveniently located, sh*tty airport.
If Aeroporti di Milano can expand LIN into a hub airport, there would be no reason for AZ to continue operating their mega hub out of FCO.

Despite your screen name, you seem quite assertive. Do you have any figures showing O&D traffic in Rome is way below Milan ?
It is obvious than Milan is closer to the center of Europe than Rome but it is not enough to establish a hub. There would be many other parameters to take into consideration (but totally off-topic here).
Currently almost 100 airlines fly to FCO vs 15 airlines to LIN. The greater attractivity of Milan in terms of O&D traffic, despite your statement, needs to be established.

Quoting Wisdom (Reply 107):
The numbers are here:
LIN-ORD: 7326km FCO-ORD: 7762km FCO= +436km
LIN-LHR: 983km FCO-LHR: 1446km FCO= +483km
LIN-FRA: 512km FCO-FRA: 958km FCO= +446km

What numbers ? Why did you choose these 3 cities ? In fact when it comes to intercontinental traffic, FCO is better located than LIN (distance wise), at least for 7 routes out of the 10 busiest...
Source : http://en.wikipedia.org/wiki/Leonard...da_Vinci%E2%80%93Fiumicino_Airport + the grear circle mapper.



To get back on topic, according to the French business newspaper "Les Echos" (today's edition), it is confirmed that AF/KL is closely auditing AZ. It is reported that Alitalia has now "the lowest cost structure in Europe" but its "revenue is catastrophicly low".
Furthermore Les Echos states that EY has now given up to take a stake in AZ.

The fate of the italian carrier seems more than uncertain.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-23 13:51:11 and read 15762 times.

Per a Lufthansa study I have, Northern Italy is almost twice the air travel market size compared to the Rome area, however when it comes to airports, then Rome has Milan (LIN+MXP) beat in overall demand.

One of the issues is that Northern Italy is fragmented with many airports - Venice, Genoa, Torino, Bologna, Verona, etc, and many of these communities are easier served via other European hubs then expecting their population and traffic to utilize Milan as a single gateway.

Rome on the other hand serves a large section of the country and does not have to fight for traffic with other nearby airports to the degree that Milan has to. Add in being a mega global tourist market, the national capital, and its own level of business and commerce, Rome generates quite a bit of its own demand.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Wisdom
Posted 2013-01-23 14:50:15 and read 15622 times.

Quoting Azure (Reply 108):
What numbers ? Why did you choose these 3 cities ? In fact when it comes to intercontinental traffic, FCO is better located than LIN (distance wise), at least for 7 routes out of the 10 busiest...
Source : http://en.wikipedia.org/wiki/Leonard...da_Vinci%E2%80%93Fiumicino_Airport + the grear circle mapper.

Sorry but I have to completely reject your argument. The reason is because you're looking at it from a purely theoretical perspective, and not from the pax/traffic perspective.

You have to think in terms of Mr. X going from A to B via C.

Long story short, most transfer traffic short or long haul generates or has a destination in Western Europe.
That is France, Germany, the UK, Benelux, Italy, Switzerland, Spain, Portugal and to some degree Scandinavia.
Eastern Europe is a secondary market but as an airline located in Italy, it's not a market that you would be chasing.

If AZ want to have a hub that serves these markets, they need to position themselves close to these transfer markets.

So let's suppose that there is Mr. X generating in Lyon, France.
He wants to travel with the cheapest possible fare to...XXX

For instance take all the US destinations. ATL, BOS, ORD, LAX, MIA.
Travelling through FCO, his return trip would take 1660km longer than through LIN (supposing that LIN is transformed into an intercontinental hub). 1660km!!!

Now let's take BKK as an example. Yes, BKK is closer to FCO!!
BUT!
The pax generating in LYS would be travelling 456km more on his trip to BKK. Why? Well because even though FCO-BKK is closer than FCO-LIN, LYS-FCO is longer...

You can twist it or turn it the way you want, it just doesn't work out because with FCO the backtrack to Europe is always longer.


One of the reasons AZ is losing money is because they chose a hub too far away from the rest of Europe.
This results in them incurring higher costs on their transfer pax, which are usually the most price sensitive ones.
To get the same pax, they would need to offer better fares than the rest, as pax would have to cope with less convenient itineraries.

Another reason is that LIN can cover all traffic from Europe to anywhere in Italy, while FCO only makes sense if your destination is Rome or anything more to the South. This is the reason why AZ is losing it's entire Europe-Italy market except Rome and Southern Italy, to the LCC's.

Quoting LAXintl (Reply 109):
One of the issues is that Northern Italy is fragmented with many airports - Venice, Genoa, Torino, Bologna, Verona, etc, and many of these communities are easier served via other European hubs then expecting their population and traffic to utilize Milan as a single gateway.

Like I'm saying above, with FCO, you can forget those airports, you have no chance.
With a hub in "pumped-up LIN", you can still be part of the West-European transfer market and also serve FCO through LIN. Being part of a transfer market is what hubbing is all about. A hub's purpose is not to serve O&D markets first and take a big cost hit on the transfer market.

FCO is a big market, that's why I'm saying that AZ should still have a "express" presence there, to serve some mainline routes directly. 10 A320's will do.

Italy has to stop this nightmare once and for all. Italy needs to build one main airport and it needs to be in Milano.
Basta

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Viscount724
Posted 2013-01-23 14:55:06 and read 15598 times.

Quoting Wisdom (Reply 102):
Who is going to pay 250 millions for a mileage program?

AC's Aeroplan loyalty program was sold for something like $600 million in two stages a few years ago.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aquila3
Posted 2013-01-23 15:19:51 and read 15547 times.

Quoting Wisdom (Reply 107):
MXP is an inconveniently located, sh*tty airport.


Could you elaborate a little bit, possibly in civilized terms?

For what I know, MXP is connected by 2 different highways (A8 and A4) from Milan, have a fast connection from west -Turin. You can come from Switzerland all in highway or shorter using some 10 km of large normal roads in less than 1 hour any time. It has a rather slow but clean and on-time (not the state one) dedicate railway system that brings you directly to the center of Milan or to the main railways stations..
Plus the bigger investment in highway infrastructure in the North Italy (Pedemontana) is bringing a direct highway from E. of Milan directly to MXP area, passing North, avoiding going down to Milan.
Many Villages along the Swiss border are completely turned upside down for a new modern railway, coming from Swiss in order to serve MXP from Lugano area. Those two last projects surprisingly seem to be on time at least for the Italian standards.
The airport has plenty of parking and services for its size and has a good standard about baggages delivery.Then take care that Milan is a rather small metropolis itself ( around 1 Mil) but has a large suburban area especially in the North - West of 4-5 Mil, depending whre you stop looking. Lombardy itself is approaching 10 Mil, so the fact of serving directly "center" itself it almost pointless. About geography MXP is located in a nice flatland along the Ticino river with many visual hints, with considerable less foggy days than SE Milan (LIN) and few winds being closed by mountains N and W. Any pilot thet I have spoken about just loves to land there in relax.
So, OK, it is not perfect, the cheap green tiles are already wear after 10 years, and are a shame to our proud tiles industry, the railway must be speed up (and it will) , it lacks a good high class restaurant (maybe the new Sheraton just built inside has one, not sure) but from here to say this is s**t and that it would be better to build a new LIN ( I guess a 25 year project if fastly managed) there is some way in the middle.
That MXP is no good for CDG and less so for AMS is obvious, but I won't care less. And do not tell me about the experience of connecting in CDG.
Lombardy economy (and Italy as a 30% direct consequence) desperately needs a working airline (being it AZ or ..Z) and moreso a hub in Milan area and i do not see anything better than MXP, by far.

That's again my 2 (very biased of course) cents,

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Wisdom
Posted 2013-01-23 16:17:59 and read 15485 times.

MXP is too far from the city and from the Milan periferica.
In quiet hours you're lucky to do it in 1 hour, if it's busy, you're looking at 2-3 hours.
For someone who's coming off a European flight, it's just too inconvenient.

This is the main issue.

From Switzerland (Lugano) it's almost the same to drive to MXP or to LIN.

My personal opinion on MXP:

MXP's terminals inside are old-fashioned and dirty looking, like a work in progress that will never be finished, not what you expect as a transfer pax. FCO has more of an international hub feel.

Every time you drive up there, there is some kind of constructing going on. It's funny because I used to joke around with my colleagues about it and they wouldn't believe me so we pulled up Google Maps Street View and BAM!! there you have it... construction works all over the place. Take a look, see for yourself.

I've been to MXP regularly for 15 years and there have always been some kind of construction works going on inside or outside. It's ugly and inefficient. Landside, you always have a bunch of weird people trying to steal your luggage, your wallet or sell you unmarked tickets to the next AC Milan game or fake jewelry.
I feel safer in the Bronx.

The satellites are ugly and inefficient from a ground operations perspective. Ugly from both outside and inside as they block the view to the airside and aircraft are all parked in different directions. Chaos. Why did they need all these satellites when you have this long of an airport? They should have shaped the airside to accommodate more aircraft, not build separate satellites. It would have costed much less and would have been much more beautiful.

And what a noisy terminal. A lot of noise everywhere.

I also don't like how the terminal makes 45° curves. It's awful architecture and doesn't seem to serve any purpose but to mark a curve... it's plain ugly.

All in all, not an efficient airport and definitely not a relaxing experience. Too much ugliness in one spot.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-23 16:28:03 and read 15455 times.

Quoting Wisdom (Reply 110):
Italy has to stop this nightmare once and for all. Italy needs to build one main airport and it needs to be in Milano.

Yes a single airport would help airline operations in Milan.

Without getting into the LIN vs MXP debate however, I still don't see even a single airport being able to serve Northern Italy properly.

You will still have the issue of a fragmented market as many of the cities I listed above will utilize foreign hubs. There is a reason why people refer to Munich as "Italy's northern most hub". A single airport will not have people from the entire region somehow flock to Milan for connections when they can do it from their local airport already.

As I pointed out earlier even a single Milan would be a smaller local airline market then Rome.

Guess an airline airline is left with setting up a hub at a hypothetical single Milan airport, and maybe garner a more premium crowd but smaller market, or otherwise Rome with more volume, but more touristy. Frankly the options are not very good either way.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Wisdom
Posted 2013-01-23 17:20:17 and read 15434 times.

Quoting LAXintl (Reply 114):
You will still have the issue of a fragmented market as many of the cities I listed above will utilize foreign hubs. There is a reason why people refer to Munich as "Italy's northern most hub". A single airport will not have people from the entire region somehow flock to Milan for connections when they can do it from their local airport already.

Definitely not in FCO, but why not in Milan?
If AZ can establish a solid hub in Milan, they can compete much better against competing hubs such as MUC to serve connections to airports, even regional ones, all over Europe.

If you're flying Bologna-Stockholm, in absence of direct flights, you can fly BLQ-MUC-ARN with LH or BLQ-LIN-ARN with AZ. So there you put AZ on the map.

BLQ-FCO-ARN is definitely not an option however, perfectly showing why putting a hub closer to the South Pole than to Europe is costing AZ dearly. AZ will not be competitive until they resolve this issue.

Do the math, 500+ flights a day flying 500 extra kilometers each for no additional revenue= hundreds of millions of avoidable costs per year! Add lost revenue from not operating in Northern Italy and the cake is dressed.

You keep talking like a hub in Milan would mean losing Rome. Anything worth operating direct from Rome, except intercontinental should definitely be operated direct, using a small amount of aircraft. Like you said, this is a leisure market, so it's not about having direct flights and frequencies, but a combination of price and convenience.
All the rest to/from Rome where a direct route is not worth operating, can be served through Milan, which would be at least as convenient as flying any other airline in Europe.

[Edited 2013-01-23 17:31:51]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: baw716
Posted 2013-01-23 19:05:24 and read 15389 times.

Once again, I'll draw on my experience from 1998-2002 when I was running AZ in SFO.

At the time, AZ was attempting to push MXP as its principal hub. The problem, the new terminal was at MXP (in Italian terms) a "casino". I haven't been there in awhile, but it sounds like it still is a mess.

The other issue in Northern Italy as quite well pointed out is the fact that you have some many secondary airports which are served directly into other European hubs and not MXP directly. When we operated MXP as the principal hub, we fed all of it via MXP which supported the traffic base ex MXP.

Then AZ decided to go with a dual hub solution. An even messier debacle and an aircraft operational nightmare.

Then AZ decided to focus on Rome as its major hub and MXP as a destination driven airport.

It is a fact that the bulk of the high yield revenue comes from the north of Italy. Anybody who disputes this really doesn't understand the Italian market.

It is also a fact that the low yield revenue tourist traffic is driven to the south; Rome and points further south and east. AZs costs are effective but their yield is crap. A Rome hub is the reason.

So what should happen:
1. AZ should operate dual hubs. It's a crappy idea, I know, but in Italy, there are politics that must be dealt with and the reality is that dual hubs is probably the only solution that makes sense for AZ. The question is how the flying is distributed between the hubs.

2. If AZ reestablishes MXP as its principal connecting hub, it will pick up more traffic to central Europe...and more O/D traffic to/from Milan going beyond Italy. This just leaves the question of Linate. Linate should be used for intraEuropean flying only. Traffic going via MXP from long haul destinations can use MXP...realistically it's a 45 min ride on the train from Milan. To get from downtown Rome to FCO can take an hour at certain times of the day, so I don't see the difference in that respect between the two airports.

3. As for Rome, O&D traffic and beyond to points in southern Italy, as well as certain destinations in the Middle East in which Rome makes a better connecting hub than MXP.

4. As for intraItaly...most everything should be operated with the E jet and not the Airbus; the Airbus should be left for a FCO-LIN shuttle service which, if managed correctly, would certainly be better than the train options between the two cities, which is the principal competition for this route...not competitors on LIN-FCO.

5. I would also explore the possibility of using Ciampino for certain IntraItaly flying that would take some of the pressure off FCO. An e-jet operation from Ciampino might not be a bad plan.

Of course, I'm tossing ideas out without really having studied the current economics of such moves, but AZ has the fleet flexibility to be able to do a lot and with an improved long haul premium product, chances to capture more high yield traffic to Italian points....if it were properly positioned within the SkyTeam alliance.

I've been a supporter of AZ, because I like an underdog. They just need some personnel running the company that have a more global sense of what the Italian carrier can bring to the SkyTeam alliance and how their product should be harmonized with others in the alliance to combat the influence of Star Alliance in central Europe. If they can get this right, then AZ might have a fighting chance.

My Italian friends would agree...I think.

Salute
baw716

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: lightsaber
Posted 2013-01-24 12:11:38 and read 14998 times.

Quoting LAXintl (Reply 79):
AZ would basically become a intra-European airline with focus on feedings CDG from throughout Italy for longhauls headed to the Americas, and feed Abu Dhabi from points in Italy for traffic headed East.

I'm afraid that is likely. However, MXP should be able to serve within narrowbody range a good market. AZ must adopt a significantly different strategy. That has a chance of working.

Quoting Wisdom (Reply 115):
If AZ can establish a solid hub in Milan, they can compete much better against competing hubs such as MUC to serve connections to airports, even regional ones, all over Europe.

But AZ hasn't shown the discipline to keep costs down and expand smartly (at a profit). Soon they will compete to the east with a TK and the new IST airport. Heck, with the expanding mid-east airports, AZ will have issues to the east. So what is Italy goes to the LCCs anyway...

If MUC ever expands, MXP and FCO will be knocked out of the hubbing business unless AZ really changes.

Lightsaber

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Aquila3
Posted 2013-01-24 14:27:12 and read 14817 times.

Quoting Wisdom (Reply 113):
you're looking at 2-3 hours.

I was living in the area for more than 30 years., I worked there for a while and around it for most of my time.
It is abosolutely an exaggeration.

It can happen a couple of times in a year if you are very unlucky or you took a very funny itinerary.
But the same happened to me, as a lost foreigner driving to CDG more than once.
If you do not know whre to go, I recommend the train. In 45 minutes you are there, always.
Yeah the train is "ugly", maybe. It also smells bad , especially in the loo.

From Lugano to LIN is almoust double of the time in a normal working day than going to MXP.
Entering the East Tangenziale from A9-A8 -A4 down to LIN is a nightmare.
I am doing it tomorrow morning BTW, so I know what I am speaking about.
About you perceived "ugliness" I concede you that, the beauty is in the eye of the .... but I do not think that this a valid reason to discard an airport for rebuilding another one (if you can get through the NIMBYs and all the rest) especially in these hard times. At lest we should decide it ourselves until it belongs to the City of Milan (through SEA) and not to our EU friends" from the North that always know better .

Quoting Wisdom (Reply 113):
Landside, you always have a bunch of weird people trying to steal your luggage, your wallet or sell you unmarked tickets to the next AC Milan game or fake jewelry.
I feel safer in the Bronx.


This is so much a racist opinion that I just quote if for your shame.


And finally, AMS is not ugly , quite nice, CDG is not nice nor ugly,.
Both smell quite badin wet days. LUG smells much better. if you want to know my irrilevant fresh air about subjective aestics and Airport odors there you are.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-01-29 11:56:55 and read 14083 times.

AZ is seeking €200mil loans to help through early part of the year and avoid need for recapitazilation.

Also sale of Mile Miglia would help delay further need of added €350-400mil.

They expect the loans to be provided by several banks to be available by February 4th.

Story:
http://www.repubblica.it/economia/fi...inanziamento_200_milioni-51495916/

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-01-29 14:05:27 and read 13853 times.

Constantly pumping money into a sinking ship will not help AZ. Their problem is FCO.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-02-11 10:09:45 and read 13352 times.

Reports are Alitalia has hired US firm Boston Consulting as advisers for a possible merger with Italian state railway Ferrovie dello Stato.

Also AZ CEO on Monday gave a speech that highlighted the benefit US airlines have been able to achieve by a series of large mergers, while Europe industry lagged behind with similar consolidation, and that he "think(s) there is a case for Alitalia to move into a larger group."


Story:
http://www.marketwatch.com/story/ali...n-independent-2013-02-11-114855514
and
http://www.foxbusiness.com/news/2013...e-as-independent-carrier-at-stake/

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-12 08:17:20 and read 12881 times.

I think AF is the best option for AZ. I dont think SU is a good partner considering they are also a government run airline. Of course the downside of AZ joining AF is the termination of all its long-haul flights and being reduced to a short-haul regional carrier.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-13 06:09:41 and read 12434 times.

Who do you guys think is the best partner that AZ should hook-up with? Im still going with AF/KL though i am interested in hearing other people's opinions on this.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-02-13 18:16:16 and read 12166 times.

Now news out CEO Andrea Ragnetti might quit and has apparently just negotiated a €2mil severance package.
This might become official at the board of directors meeting scheduled for February 25th.

Also this week, loan for €150mil is expected to be approved to provide the company some oxygen to make it through the winter months.

Story:
http://www.ilmessaggero.it/economia/...ita_2_milioni/notizie/251499.shtml

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-14 06:08:25 and read 12034 times.

I have a feeling that if AZ does survive this time, it would become a very different airline a year from now. I think its long-haul days are quickly coming to an end. The CEO of Ryanair says that if AZ survives it would have to become a much smaller airline.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-02-14 11:02:56 and read 11808 times.

Board has approved a €150mil convertible loan to boost liquidity. Now awaits shareholder vote on February 22nd.

Alitalia Board Approves EUR150 Million Convertible Loan
http://www.foxbusiness.com/news/2013...s-eur150-million-convertible-loan/

Also part of the loan will require Air France-KLM to invest further €37.5mil into AZ to retain its 25% holdings or otherwise see it diluted.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-02-23 16:14:13 and read 11602 times.

Board meeting next week.

Topic to be covered apparently;
o 2013 budget to be approved. Forecast €200mil loss.
o CEO Andrea Ragnetti will be asked to step down
o Sale of some slots at Heathrow
o 2 777s to be sold/lease back

story:
http://www.ilsole24ore.com/art/finan...vertice-081847.shtml?uuid=Ab7VQUXH

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: art
Posted 2013-02-24 02:08:29 and read 11252 times.

Quoting LAXintl (Reply 129):
Board meeting next week.

Topic to be covered apparently;
o 2013 budget to be approved. Forecast €200mil loss.
o CEO Andrea Ragnetti will be asked to step down
o Sale of some slots at Heathrow
o 2 777s to be sold/lease back

Anything in there to move the company towards viability?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: mrcomet
Posted 2013-02-24 05:32:40 and read 10976 times.

AZ is in trouble for absolutely the worse service on continental Europe. Nothing will change that. They are always on strike. I bought a ticket once and they cancelled the service a few weeks before I was set to travel and never bothered to notify me. I never fly them because they are always late and you will miss connections. How long can you run crappy service and survive. They also never really took advantage of the US market. Having a flight from America to the middle of Europe is a great advantage and they never maximized it. Crappy airline. Good riddance. You can't save a corpse.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-24 14:18:44 and read 10668 times.

I wonder if AZ will eventually move its headquarters back to MXP now that it will get a new CEO. I heard news that AF is not interested in purchasing AZ any moment soon, which makes me wonder if AZ will survive at all in the near future.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-02-24 18:11:08 and read 10523 times.

Quoting miaintl (Reply 130):
I wonder if AZ will eventually move its headquarters back to MXP now that it will get a new CEO. I heard news that AF is not interested in purchasing AZ any moment soon, which makes me wonder if AZ will survive at all in the near future.

Right - just when your finances are in dire condition - go with an expensive move to MXP while LIN is sucking up all the high-yield traffic.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-25 04:14:03 and read 10334 times.

Close LIN and make MXP Milan's sole airport then problem solved. LIN can remain open to general aviation and low-cost traffic.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 777
Posted 2013-02-25 04:28:09 and read 10316 times.

Quoting mrcomet (Reply 129):
AZ is in trouble for absolutely the worse service on continental Europe. Nothing will change that. They are always on strike.

This was probably the case with the old AZ.
The new one has dramatically improved the hard and soft product as well as the on time index.

Look here at the bottom of the page
http://opsawards.flightstats.com/winners-airline-2011.html

Regarding the strikes, since 3 years (with the start up of the new company), they are almost disappeared.

The problems currently affecting the New AZ are different than that as they are more related to the dramatic competition in the domestic and European routes and a LR fleet still too small.

In other words, the losses accumulated in the Domestic/European market are bigger than the profits generated with the long haul traffic.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-25 05:27:14 and read 10210 times.

One way of fixing this problem is transferring the short haul connecting traffic to MXP, which is better located for connections throughout Europe.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-02-25 05:32:34 and read 10208 times.

Quoting miaintl (Reply 134):
One way of fixing this problem is transferring the short haul connecting traffic to MXP, which is better located for connections throughout Europe.

What an amazing idea! Could you believe that all of those smart people who work at Alitalia (with years of experience and grad degrees etc) could not even think of this on their own....what a shame.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-02-25 05:51:25 and read 10144 times.

Quoting miaintl (Reply 134):
One way of fixing this problem is transferring the short haul connecting traffic to MXP, which is better located for connections throughout Europe.

This is what they had before.

= failure.

They ended up running dual Milan hubs that compete against each other.

Low yield transfer traffic and half empty shorthaul flights at MXP, while the O&D traffic picks the LIN flight.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-25 09:22:50 and read 9985 times.

Which is why closing LIN is the best option. MXP should be Milan's sole airport and LIN should be left to general aviation and government traffic. Plus now that Easyjet is flying out LIN I see AZ being pushed out of that airport and having no choice but to move all of its operations from LIN to MXP. The only way to make an MXP hub work is to close LIN, which in my opinion should have been done years ago.

[Edited 2013-02-25 09:24:59]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-02-25 14:32:23 and read 9788 times.

Breaking News : the chief executive of Alitalia, Andrea Ragnetti, has just resigned. The reasons have not been specified. Alitalia announced earlier in the day (Feb 25, 2013) a net loss of 280 million euros in 2012, after a loss of 69 million euros in 2011...

"Alitalia had a good fourth quarter and should break even", Ragnetti said to the WSJ in an interview dated Feb. 11, 2013... (http://online.wsj.com/article/SB10001424127887324880504578298031789724130.html). It sounds unbelievable that the Chief Executive of Alitalia did not know better about his company's financial situation !

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-02-26 02:22:04 and read 9494 times.

Quoting Azure (Reply 138):
Breaking News : the chief executive of Alitalia, Andrea Ragnetti, has just resigned. The reasons have not been specified.

Its been coming for several weeks.

See....

Quoting LAXintl (Reply 124):
Now news out CEO Andrea Ragnetti might quit and has apparently just negotiated a €2mil severance package.
This might become official at the board of directors meeting scheduled for February 25th.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 777
Posted 2013-02-26 02:33:20 and read 9464 times.

Quoting Azure (Reply 138):
"Alitalia had a good fourth quarter and should break even",

The break even he was referring to was related to the fourth quarter only!

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-26 16:17:25 and read 9125 times.

Ahhh the sad saga of AZ, an airline that should have died 5 years ago.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 777
Posted 2013-02-27 13:46:43 and read 8920 times.

According to the Austrian newspaper Der Standard, Niki Lauda is in talks to become the new AZ's CEO...

Link in Italian
http://www.ilsole24ore.com/art/notiz...litalia-220526.shtml?uuid=Ab32K6YH

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-27 14:11:42 and read 8846 times.

Quoting 777 (Reply 142):

A non-Italian running AZ?!? This will be interesting.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: aloges
Posted 2013-02-27 14:23:43 and read 8828 times.

Quoting 777 (Reply 142):
According to the Austrian newspaper Der Standard, Niki Lauda is in talks to become the new AZ's CEO...

In case there's any truth to that, we may expect a sale of Alitalia within two years - Lauda Air: 14 years to sale, NIKI: eight years, minus another six = two years!   

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-02-27 14:43:23 and read 8795 times.

Quoting 777 (Reply 142):
According to the Austrian newspaper Der Standard, Niki Lauda is in talks to become the new AZ's CEO...

Link in Italian
http://www.ilsole24ore.com/art/notiz...litalia-220526.shtml?uuid=Ab32K6YH

May be another episode of the "sad saga of AZ", indeed... I wonder wether AFKL which owns 25% of AZ would accept a new LCC in Europe... Der Standard also states than the current CEO of the Italian Railways may become the new CEO of Alitalia. We will see.

Quoting 777 (Reply 140):
The break even he was referring to was related to the fourth quarter only!

Indeed, I probably read this news too quickly ! Nevertheless he should have adopted a low profile giving the catastrophic state of the airline finances... He would not have resigned if the shareholders were happy with his job...
There is an interesting article today in a French blog that compares the current situation at AZ and Italian politics : "Austerity does not pay" : http://lauer.blog.lemonde.fr/2013/02...6/alitalia-lausterite-ne-paie-pas/

I am translating some excerpts :

"A national airline has something iconic for a country. The correlation between Alitalia and the political and economic situation of Italy seems obvious. Both are saddled with debt, do not have enough income and do not know who will be able to control them.

Italy has awakened, Tuesday 26 February, without a government and Alitalia without a boss. Andrea Ragnetti had to resign, because he was unsuccessful in giving the airline some altitude. His policy of cost reduction has not prevented a fourfold loss in 2012. Austerity is a difficult art. Mario Monti, president of the Italian Council of Ministers would not say otherwise.

Alitalia does not suffer because of its cost structure, which is now one of the lowest in Europe, but a dearth of revenue. Passenger numbers fell to 24.3 million. In Italy, Ryanair is now bigger than Alitalia. This illustrates the failure of the bailout plan prepared in 2008 by Silvio Berlusconi. The case cost € 3 billion to the taxpayer. Almost in vain.

At the edge of insolvency, Alitalia was obliged, a few days ago, to request from its shareholders a bridging loan of 150 million euros. A simple warm-up before a new capital increase that is already looming.

For the shareholders, the cup is full, hence the departure of Andrea Ragnetti. Beyond the name of his successor, Alitalia enters a turbulence zone. Now that the shareholders agreement has expired, what will be the decision of Air France, which owns 25% of the capital? The French company, struggling with its own problems, does not have the means to take control of Alitalia. But it is unlikely that the Italian shareholders will wait patiently until Air France is out of the woods".

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: brilondon
Posted 2013-02-27 15:10:53 and read 8734 times.

Quoting art (Reply 3):
Quoting jetblueguy22 (Reply 4):
I'm not sure why AF would want to take over Alitalia. Even if they get it at a bargain price they have large losses. Not something to take on when AF is struggling to make money itself.
Blue
Quoting art (Reply 5):
No point in injecting capital to keep it afloat as it is - it will just sink again.

First they need to plug the leakage, then determine how many people it would take for the operation to be profitable on a limited number of runs.

Quoting art (Reply 10):
Quoting Aquila3 (Reply 8):
Also I would think is normal that a Government would try to keep a strategic asset like a national airline alive whenever possible, of course.

I don't understand. What makes AZ a strategic asset? They provide a service to the economy that other airlines could provide with less risk of the service becoming unavailable due to financial problems preventing the airline from providing the service.

Quoting Aquila3 (Reply 8):
About assets, once you get rid of all the people you do not need (hope it does not happen)

Why do you hope AZ keeps people it does not need? Makes it more likely for AZ to lose money and go bust, doesn't it?

This is the kind of thinking that will forever keep AZ in the red. They need to shed jobs and unprofitable routes and need to reorganize their entire operation or even if they get an infusion of capital that will just leak out and all the good intentions will be for not. The government needs to stay the hell away from this and swallow their notional pride if they have any. The EU needs to reform its entire view of how airlines operate in Europe so they won't keep funding these worthless ventures and allow them to die on the vine. I feel like I have mentioned this before when the topic of AZ comes up.

Please for the sake of all involved let AZ die a natural death and we can all get on with life.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-02-27 15:40:29 and read 8722 times.

Quoting brilondon (Reply 146):
First they need to plug the leakage, then determine how many people it would take for the operation to be profitable on a limited number of runs.

According to various sources (and in particular AZ main shareholder, AF), the issue is not AZ cost structure "now one of the lowest in Europe", but their "catastrophic revenues" (sic).
In a nutshell, AZ needs to attract more customers or increase their fares !
An almost impossible equation in the current context I'd admit !


Quoting brilondon (Reply 146):
The EU needs to reform its entire view of how airlines operate in Europe so they won't keep funding these worthless ventures and allow them to die on the vine.

But this is exactly what the EU is doing already ! The EU did not interfere in the creation of the "new" Alitalia in 2008 (and could not do so anyway). For your information, AZ is totally private and does not receive any subsidies from neither the Italian state nor the EU !



Quoting brilondon (Reply 146):
Please for the sake of all involved let AZ die a natural death and we can all get on with life.

Really ? What about the thousands of employees ? Will your country of residence pay for their pensions ?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Hywel
Posted 2013-02-27 16:04:06 and read 8689 times.

Quoting Azure (Reply 147):
According to various sources (and in particular AZ main shareholder, AF), the issue is not AZ cost structure "now one of the lowest in Europe", but their "catastrophic revenues" (sic).
In a nutshell, AZ needs to attract more customers or increase their fares !

It would help if they stopped offering so many crazy promotions, and closed all the loopholes in their booking system allowing open jaw flights to Beijing for € 160...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-02-27 16:13:33 and read 8693 times.

Quoting Hywel (Reply 148):
their booking system allowing open jaw flights to Beijing for € 160...

Lol ! I have heard of these bugs. But AZ thought it was just more simple to axe Beijing than fix its booking system   

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-02-28 05:33:47 and read 8524 times.

I still believe the reason that AZ is not attracting as many customers is becuase of where their hub is located. They cannot attract a healthy premium crowd and cannot compete effectively compete against lCC because most people who live north of Rome just do not use AZ and prefer using other legacy carriers and lCCS. As long as AZ is based in FCO it will struggle to remain competative and will be at a great disadvantage. But we must keep in mind that AZ is still a governement-owned entity so keeping AZ in FCO is very conveniant for the state.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 777
Posted 2013-02-28 05:49:04 and read 8465 times.

Quoting miaintl (Reply 150):
But we must keep in mind that AZ is still a governement-owned entity so keeping AZ in FCO is very conveniant for the state.

Absolutely not: since JAN2009 AZ is 100% owned by private investors!

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: realsim
Posted 2013-02-28 06:10:21 and read 8689 times.

Quoting LAXintl (Reply 121):
Reports are Alitalia has hired US firm Boston Consulting as advisers for a possible merger with Italian state railway Ferrovie dello Stato.

I am quite sure this would be blocked by the European Comission.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: PanHAM
Posted 2013-02-28 06:10:52 and read 8711 times.

Quoting 777 (Reply 142):
According to the Austrian newspaper Der Standard, Niki Lauda is in talks to become the new AZ's CEO...

Well, he speaks Italian, knows the country quite well but he has an excellent full time job at Daimer Benz F1 racing, AFAIK. Would be difficult to do both, even if he starts only as an advisor.

The employees would love his management style and I guess the unions would put a contract out on him. He could swing AZ around if he defeats the unions and bring the employees on the level of reality.

But why should he do that at his age? It would be much easier to kick Red Bull from #1 at F1

   

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: jumpjets
Posted 2013-02-28 06:26:38 and read 8681 times.

Quoting miaintl (Reply 150):
I still believe the reason that AZ is not attracting as many customers is becuase of where their hub is located

Also in Milan LIN is not exactly an airport that I would chose to use if possible - having used it for the first time last September I was very surprised at what a low quality airport [from the passenger point of view anyway] it was and I'd try and avoid using it again - and if my attitude is typical then the state of the airport is not going to do AZ any favours.

I should mention that my experience was based on a domestic arrival transferring to the non schengen departure waiting 'area' which might be worse than the schengen zone experience.

[Edited 2013-02-28 06:29:05]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 777
Posted 2013-02-28 07:49:10 and read 8622 times.

Quoting PanHAM (Reply 153):
Well, he speaks Italian, knows the country quite well but he has an excellent full time job at Daimer Benz F1 racing, AFAIK. Would be difficult to do both, even if he starts only as an advisor.

  

Quoting PanHAM (Reply 153):
The employees would love his management style

In addition to that, Niki Lauda is still considered a superstar in Italy, due to his victories with Ferrari in the '70s: I wouldn't be surprised to see, after a flight with Lauda as Captain, a good amount of pax asking for an autograph...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-03-01 04:19:30 and read 8353 times.

Quoting 777 (Reply 151):
Absolutely not: since JAN2009 AZ is 100% owned by private investors!

You are correct ! It is quite annoying to read such nonsense as :

Quoting 777 (Reply 151):
AZ is still a governement-owned entity

when the information can be easily checked on the web :


(Source : alitalia corporate website)

AZ hub is FCO because this is were the traffic is. The trouble for Alitalia is to be found in the specificity of the Italian market : Rome sustains far more traffic than Milan, but the latter is more high yielding than the former...

Quoting realsim (Reply 152):
Quoting LAXintl (Reply 121):
Reports are Alitalia has hired US firm Boston Consulting as advisers for a possible merger with Italian state railway Ferrovie dello Stato.

I am quite sure this would be blocked by the European Commission.

The EC would likely block such a merger if there is no sufficient guarantee from the Italian authorities that both the rail and air markets are widely open to competition, which is not the case at the present time (eg the state owned Italian railways is currently the sole train operator in Italy, and AZ is even suing U2 for the Rome / Milan route - etc.)

Quoting PanHAM (Reply 153):
He could swing AZ around if he defeats the unions and bring the employees on the level of reality.

Again, according to AZ largest shareholder (AF), AZ troubles do not come from its cost structure, "now one of the lowest in Europe, but from its catastrophic revenues"...

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: brilondon
Posted 2013-03-01 06:03:52 and read 8210 times.

Quoting Azure (Reply 147):
Really ? What about the thousands of employees ? Will your country of residence pay for their pensions ?

What are you talking about? What pensions? Are they still giving all their employees private pensions? If they are let go, then they have to find another job? What pensions, who has a pension any more? This is exactly the mindset that will continue to dog this airline and doom its existence. No government should fund private company's pension obligations. That is the company's problem, not the government. If it truly a private company as you insist then the company should not have made promises that it cannot keep. Wasn't AZ struggling with these same issues last bankruptcy? Why would they have been allowed out of bankruptcy if they did not address these issues and would they have to address them this time.

[Edited 2013-03-01 06:17:05]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: Azure
Posted 2013-03-01 06:48:26 and read 8159 times.

Quoting brilondon (Reply 157):
What are you talking about? What pensions?

In most European countries when you loose your job you get an unemployment pension from a government organisation, indeed.

Quoting brilondon (Reply 157):
If it truly a private company as you insist then the company

You make me smile, thank you ! It is just a fact ! Calm down.

Quoting brilondon (Reply 157):
Why would they have been allowed out of bankruptcy

They were not "allowed" out of bankruptcy. In 2008, when AZ was already in bad shape (but not technically bankrupt), AF made a bid to buy 100% of the italian carrier, which Berlusconi opposed, for nationalistic reasons. He managed through its acquaintances to find a team of purely italian investors (Benetton, Riva, Banca San Paolo, Pirelli, etc.) that created a new Alitalia after the merger with Air One. His plan failed obviously !

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 777
Posted 2013-03-01 08:03:18 and read 8079 times.

Quoting Azure (Reply 156):

the state owned Italian railways is currently the sole train operator in Italy

This is not true as since almost a year there is Italo, the first private owned high speed train service in Italy.
http://www.italotreno.it/EN/Pages/default.aspx

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LO231
Posted 2013-03-02 15:56:41 and read 7746 times.

Please help me. I am flying to VCE in June, the cheapest ticket from BRU was AZ- and now I don't know! Do I risk it?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LO231
Posted 2013-03-03 00:24:42 and read 7628 times.

Any chance I will get on my flights? BRU-FCO-VCE-MXP-BRU in June. Or should I look for alternatices? 

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-03-04 06:08:54 and read 7249 times.

Quoting Azure (Reply 156):

Not to mention the fact that FCO's geographic location sucks. Milan may have less traffic volume but its location is ideal.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 777
Posted 2013-03-04 12:43:28 and read 7046 times.

Quoting LO231 (Reply 160):

Please help me. I am flying to VCE in June, the cheapest ticket from BRU was AZ- and now I don't know! Do I risk it?


Got both LO 788 frames already, next SN BRU-VCE-BRU

I don't think you are going to face this kind of problem.
AZ just got the first tranche of a loan from its investors and this should guarantee the continuity of the ops until they will be sold, probably by the end of 2013.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LO231
Posted 2013-03-04 13:08:28 and read 6992 times.

Quoting 777 (Reply 163):

Are you sure?SN is twice as much direct......

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-03-05 12:54:31 and read 6760 times.

Apparently AZ has cancelled orders for 17 A320 aircraft. Only 2 more A320s will be taken for delivery in 2014.

http://www.ch-aviation.ch/portal/new...ancels-a320-order-following-losses

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LO231
Posted 2013-03-09 06:32:27 and read 6416 times.

Quoting LAXintl (Reply 165):

Please tell me then that I will get a chance to fly four MadDogs accross Europe in June 

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: mercure1
Posted 2013-03-09 11:31:01 and read 6263 times.

MD-80 use end already at AZ.

Oct 13: Alitalia MD-80 Farewell Flight (by IDAWA Sep 25 2012 in Civil Aviation)
AZ MD-80 Farewell Flight With Frecce Tricolori (by 777 Dec 17 2012 in Civil Aviation)

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: ankaraflyjet
Posted 2013-03-09 16:48:22 and read 6102 times.

AZ annıunced in January that they would reinstate thrice weekly flights between ESB and FCO on March 25, 2013. They loaded the flghts to system and even started selling tickets. Last week they annonced that they are not going ahead. This is very absurd and unprofessional. The next time they intend to launch it I don't think anybody will take them seriously.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: mercure1
Posted 2013-03-09 18:47:52 and read 6039 times.

I think you have to forgive Alitalia. It has bigger worries these days then a small flight to Ankara.

Anyhow some other planned markets also will not get launched this summer including FCO-Riyadh.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-03-10 11:09:55 and read 5802 times.

CAPA has interesting article and analysis on situation at Alitalia including info on top routes and market share.

Alitalia battles for survival in 2013, again, despite operational improvements
http://centreforaviation.com/analysi...ite-operational-improvements-99946

=

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-03-10 16:09:33 and read 5633 times.

Interesting to see that Alialia doesnt get cost benefit because its mostly flying shorter haul flying for which LCCs are eating them alive.

Time for Alitalia to get back into Beijng, Hong Kong, Dubai, Montreal, Washington... dense up the cabin config's and get going already....

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: alitalia744
Posted 2013-03-10 17:54:47 and read 5546 times.

A330 rumors are reduction of J to just 20 and increase Y getting A/C to a much more dense config.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: 797
Posted 2013-03-11 05:57:19 and read 5369 times.

Quoting alitalia744 (Reply 172):

This would make perfect sense.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-03-11 09:33:24 and read 5262 times.

Quoting alitalia744 (Reply 172):
A330 rumors are reduction of J to just 20 and increase Y getting A/C to a much more dense config.

Has to be done. Hopefully they decide to get A330-300s on lease as well. This aircraft would suit them enormously. The A330-200 was just a bad decision - especially from a cost perspective.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: PanHAM
Posted 2013-03-11 09:50:08 and read 5227 times.

wrong thread

deleted

[Edited 2013-03-11 09:51:25]

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-03-11 15:53:42 and read 5095 times.

Quoting flyyul (Reply 171):

With a hub based in Rome you can forget all those high-yield destinations. AZ would have to rely on feed to make those routes work and FCO offers little of that. On routes like PEK and HKG AZ faces competition on those roues from CX which flies to FCO. From MXP those routes will work well because the yields and feed are there.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: flyyul
Posted 2013-03-11 19:27:11 and read 5077 times.

miaintl - I just spent the last weekend in Milan. The airport situation in Milan is unsustainable for a hub carrier. Forget Milan - that ship has sailed.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-03-11 23:27:44 and read 4993 times.

Well they can close LIN and make MXP the sole airport of Milan as has been pointed before. LIN is the main obstacle here.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LAXintl
Posted 2013-03-12 08:03:13 and read 4803 times.

And since closing Linate is on no ones agenda, we can circle back to the beginning of this discussion and understand AZ sole hub option in Italy is still Rome.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: OA412
Posted 2013-03-12 08:12:04 and read 4794 times.

Quoting miaintl (Reply 121):
Their problem is FCO.
Quoting miaintl (Reply 176):

No, no, no! You mention MXP over and over again, but that's just not going to happen. As long as LIN stays open, and that seems to be indefinitely, MXP simply does not work as a hub. As others have pointed out, the MXP ship has sailed. FCO is their sole hub option in Italy, end of story!

Quoting LAXintl (Reply 179):
And since closing Linate is on no ones agenda, we can circle back to the beginning of this discussion and understand AZ sole hub option in Italy is still Rome.

  

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: miaintl
Posted 2013-03-13 09:47:27 and read 4571 times.

AZ is a geographically challenged airline, especially now that it is based in FCO. But I think AZ's days as a long-haul carrier are quickly coming to an end. One AF obtains full ownership I see AZ basically becoming an IntraEuropean feeder airline.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: rj777
Posted 2013-03-13 13:27:45 and read 4468 times.

Maybe the newly elected Pope Francis will fly Aerolineas Argentinas instead of Alitalia?

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: LO231
Posted 2013-03-13 18:29:15 and read 4269 times.

Quoting flyyul (Reply 171):

I checked all possible LCCs on my planned trip to vCE or area, they all come as more expensive direct, even from EIN, I need to be in Venice not in freakingTreviso inthe middle of nowhere. Even the price BRU-VCE via FCO is cheaper than direct with LCC, you have to see what Ryanair or Transavia charge for checked in luggage.

My friend flies WAW-VCE to meet me there, and the price is even the third of what I have to pay on AZ, but fifth what IS would have paid on LCCs from cRL, EIN or AMS which are within an hour reach from here.

Alitalia rules, low price, change in FCO, and get me to VCE, not to freaking treviso.

Topic: RE: Alitalia On Verge Of Bankruptcy - Again
Username: mercure1
Posted 2013-03-28 08:38:50 and read 3900 times.

I am sure proposed service ban to flying to US is not good omen for Alitalia as summer season is around the corner.

Alitalia pourrait être interdite aux Etats-Unis
http://www.air-journal.fr/2013-03-27...terdite-aux-etats-unis-570409.html


The messages in this discussion express the views of the author of the message, not necessarily the views of Airliners.net or any entity associated with Airliners.net.

Copyright © Lundgren Aerospace. All rights reserved.
http://www.airliners.net/