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Alitalia In Cash Crisis  
User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Posted (7 months 2 weeks 3 days 20 hours ago) and read 41617 times:

Struggling Alitalia has hired investment bank to help tackle a liquidity crisis that may see it running out of cash before the end of the year.

The move is aimed at finding ways to raise more than EUR€400 million to keep the loss-making carrier afloat, according to sources.

The airline, which grew its net loss to €280 million in 2012, said in July it needed EUR€300 million this year to keep running, however has yet been able to reach a deal for a capital increase with its investor owners.

Additionally news is out that a consortium of Italian banks that took part in the carriers 2008 bankruptcy proceedings might seek to sell their stakes as soon as mid October once their lockup period expires.

Story:
Alitalia Hires Bankers To Tackle Cash Crisis
http://news.airwise.com/story/view/1378250990.html

=


From the desert to the sea, to all of Southern California
265 replies: All unread, showing first 25:
 
User currently offlineTheCommodore From Australia, joined Dec 2007, 2551 posts, RR: 6
Reply 1, posted (7 months 2 weeks 3 days 19 hours ago) and read 41642 times:

Quoting LAXintl (Thread starter):
The airline, which grew its net loss to €280 million in 2012, said in July it needed EUR€300 million this year to keep running, however has yet been able to reach a deal for a capital increase with its investor owners.

Gosh.

It will have to be someone very brave, who's not scared of taking risks.

Another 400 mil Euro is a big ask, I wish them luck with that.



Flown 905,468 kms or 2.356 times to the moon, 1296 hrs, Longest flight 10,524 kms
User currently offlineusflyer msp From United States of America, joined May 2000, 2026 posts, RR: 0
Reply 2, posted (7 months 2 weeks 3 days 19 hours ago) and read 41539 times:

When is AZ NOT facing a cash crisis? They just lurch from crisis to crisis to crisis and never actually solve any of their fundamental problems. It is probably time to just let AZ die or be absorbed by a stronger, well managed carrier...

User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 3, posted (7 months 2 weeks 3 days 19 hours ago) and read 41532 times:

I suspect the white knight this time might be EY:
Alitalia In Talks With Etihad Over Stake (by LAXintl Aug 25 2013 in Civil Aviation)

But regardless, the AZ situation is pretty scary consider the massive bleeding they are taking and desperation of running out of money on regular basis.
I don't know how many times the company can hold its hat out and seek recapitalization from its owners.
There are massive structural problem at hand with enterprise which never seem to be properly resolved.


User currently onlinethomasphoto60 From United States of America, joined Jan 2000, 3860 posts, RR: 23
Reply 4, posted (7 months 2 weeks 3 days 19 hours ago) and read 41491 times:

OMG......AZ in crisis, who'd guessed ?

I second the above post, it's probably time to let this carrier fade into the history books.



"Show me the Braniffs"
User currently offlinequestions From Australia, joined Sep 2011, 672 posts, RR: 1
Reply 5, posted (7 months 2 weeks 3 days 19 hours ago) and read 41439 times:

Sorry I have not been keeping up with AZ.

1. I thought the new management team, installed several years ago, was able to break through all the old labor rules and bloated salaries. Was this not the case?

2. Operationally can AZ realistically expect to build a financially viable route network given its home market geography? If so, what would that look like?


User currently onlineViscount724 From Switzerland, joined Oct 2006, 24075 posts, RR: 22
Reply 6, posted (7 months 2 weeks 3 days 19 hours ago) and read 41345 times:

Quoting thomasphoto60 (Reply 4):
I second the above post, it's probably time to let this carrier fade into the history books.

Agree. Switzerland is doing just fine without Swissair, and Belgium without Sabena, and you can still reach Hungary quite easily without Malev.

Italy is such a large market I'm sure other carriers will quickly fill in the gaps if AZ disappears.


User currently offlineF9animal From United States of America, joined Dec 2004, 4947 posts, RR: 28
Reply 7, posted (7 months 2 weeks 3 days 18 hours ago) and read 41253 times:

Wow, this is sad. Has Alitalia downsized, or done much in terms of cutting loss making routes, and aircraft reductions?


I Am A Different Animal!!
User currently offlinePHX787 From Japan, joined Mar 2012, 6942 posts, RR: 18
Reply 8, posted (7 months 2 weeks 3 days 17 hours ago) and read 40999 times:

Alitalia needs to sever all international routes and focus on the regional routes. Let DL or other Skyteam members handle the Rome-overseas routes.


One of the FB admins for PHX Spotters. "Zach the Expat!"
User currently offlineb757capt From United States of America, joined Feb 2004, 1337 posts, RR: 0
Reply 9, posted (7 months 2 weeks 3 days 16 hours ago) and read 40770 times:

I feel like this thread and the thread on IB cash problems have been up here for years!


The views written by this user are in no manner the views of my employer and should not be thought as such.
User currently onlineMasseyBrown From United States of America, joined Dec 2002, 5215 posts, RR: 7
Reply 10, posted (7 months 2 weeks 3 days 15 hours ago) and read 40611 times:

Quoting usflyer msp (Reply 2):
They just lurch from crisis to crisis to crisis and never actually solve any of their fundamental problems.

That's Italy.   Trenitalia, over the last ten years, has laid off 100,000 railroad workers, about half their labor force, and they are *still* considered to be overmanned by about 15% compared to other European railroads.



Consilivm: Cave ne nothi te vexant
User currently offlineusdcaguy From United States of America, joined Jan 2004, 871 posts, RR: 2
Reply 11, posted (7 months 2 weeks 3 days 11 hours ago) and read 40146 times:

I have always wondered whether AZ should have retained its hub at MXP in lieu of moving it to FCO, and if that move has had anything to do with the carrier's fortunes. I'm not sure there is a need for a huge hub in Rome when Milan is much more of destination for business travelers.

User currently offlinePanHAM From Germany, joined May 2005, 8740 posts, RR: 28
Reply 12, posted (7 months 2 weeks 3 days 11 hours ago) and read 40107 times:

The best Italian hub airport is Monaco, aka Munich. It can be reached far better from the wealthy north Italian commiunities than MXP or FCO. In addition, MUC has a better range of destinations and frequencies.

If AZ cannot sustain itself they have to bite the dust. No other carrier and certainly not AFKL can afford to cross subsidíze their operations. State help is against EU regulations



I'm not fishing for compliments
User currently offlineawacsooner From United States of America, joined Jan 2008, 1800 posts, RR: 1
Reply 13, posted (7 months 2 weeks 3 days 11 hours ago) and read 39941 times:

I wonder if it's time for LH to resurrect their LH Italia brand...except make it out of both FCO and MXP (and maybe VCE) instead of just going toe to toe with Easyjet at MXP.

User currently offlineIndianicWorld From Australia, joined Jun 2001, 2782 posts, RR: 0
Reply 14, posted (7 months 2 weeks 3 days 11 hours ago) and read 39898 times:

Its hard to see a way out for AZ at this rate.

Moving to a regional carrier (Europe/Middle East) would likely struggle to compete with its competitors, along with a need to further reduce its cost base. The latter point wont be easy.

Yes, AZ can try and rely on its Skyteam partners for broader coverage, but I am not sure how it can position the carrier to be a viable player.


User currently offlineblueflyer From United States of America, joined Jan 2006, 3701 posts, RR: 2
Reply 15, posted (7 months 2 weeks 3 days 10 hours ago) and read 39618 times:
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Quoting awacsooner (Reply 13):
I wonder if it's time for LH to resurrect their LH Italia brand...except make it out of both FCO and MXP

FCO is much more a VFR/tourism destination. High load factors, perhaps, but low yield. I don't think Lufthansa Italia is coming back anytime soon, but if it is, it'll be focused on Milan again unless the economic center of Italy shifts.

Quoting IndianicWorld (Reply 14):
Its hard to see a way out for AZ at this rate.

My guess is, unless Etihad invests (which I doubt), somehow it is back to 2008.

Then, the profitable routes and assets of the then-government-owned Alitalia were transferred into privately-held Compagnia Aerea Italiana (the current Alitalia) and the rest was left for a bankruptcy judge to deal with. I think we will soon see history repeat itself, minus the losses hopefully.

As far as the network is concerned, I'd go with a MXP hub serving key European cities and two or three intercontinental Skyteam hubs (JFK, ICN and ATL). FCO should be no more than a focus station.

The biggest issue in this plan is the sake of the AirFrance-KLM stake in Compagnia Aerea Italiana.



I've got $h*t to do
User currently offlineAirCanadaA330 From Canada, joined Aug 2008, 276 posts, RR: 0
Reply 16, posted (7 months 2 weeks 3 days 9 hours ago) and read 38699 times:

Quoting blueflyer (Reply 15):
The biggest issue in this plan is the sake of the AirFrance-KLM stake in Compagnia Aerea Italiana

with the problems at AF, I wonder if they will sell their stake in AZ.

Quoting mercure1 (Reply 3):

I suspect the white knight this time might be EY:
Alitalia In Talks With Etihad Over Stake (by LAXintl Aug 25 2013 in Civil Aviation)

Last I heard AZ is hoping to improve their situation (if possible) to get bought out by AF I am assuming those plans have changed.



Cheers;
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 17, posted (7 months 2 weeks 3 days 9 hours ago) and read 38668 times:

Quoting usdcaguy (Reply 11):
I have always wondered whether AZ should have retained its hub at MXP in lieu of moving it to FCO, and if that move has had anything to do with the carrier's fortunes. I'm not sure there is a need for a huge hub in Rome when Milan is much more of destination for business travelers.

We have been through this discussion a million times, but hubing at Malpensa is not feasible as Milan is split into two airports. With the in-city Linate being the local favorite, going to MXP is hardly attractive option unless you are flying longhaul which means airline must discount seats at MXP versus LIN, and in AZ case it was competing against itself at the two airports.

Quoting PanHAM (Reply 12):
The best Italian hub airport is Monaco, aka Munich.

Haha Yes.
For a while I think it was MUC airport, or Air Dolomiti even advertising this. MUC was connected to more Italian airports than anywhere outside Italy I recall.

Quoting IndianicWorld (Reply 14):
Moving to a regional carrier (Europe/Middle East) would likely struggle to compete with its competitors, along with a need to further reduce its cost base. The latter point wont be easy.

   I recall reading, that AZ says its most profitable segment was longhaul as competition in domestic area and shorthaul Europe was very intense with all the LCCs.

While a smaller more Europe focused AZ does sound logical, unless the cost base drops significantly to match LCCs this would be futile.


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 18, posted (7 months 2 weeks 3 days 8 hours ago) and read 38238 times:

FCO as a hub has never worked. When AZ was a state-owned airline, it operated quite a lot of routes out of FCO, but how many of them were profitable ? Obviously at that time profitability didn't matter ... Residents of Northern Italy (where most tickets are sold, especially business tickets) rarely used AZ from FCO, going instead to FRA, LHR, CDG, AMS, ZRH (not necessarily to fly on the home-based carrier, but also on other carriers such as for instance SQ or CX to Asia).
MXP as a hub was therefore the most logical choice, but in order for this to work (a) LIN should have been closed and (b) AZ should have offered a better service, since it actualy had to "steal" Northern Italian customers from other airlines. LIN was not closed due to various reasons and AZ's service remained poor, and therefore MXP as a hub was a failure (also as a consequence of KL's divorce from AZ). Additionally, AZ actually never "moved" to MXP, since it maintained a good number of flights at FCO (and the crew were also mostly Rome-based): two hubs in Italy ? It was already difficult to have one ...
Returning to FCO only made matters worse for AZ: you have a good tourist traffic in summer and Christmas at FCO (but these are low-fare passengers who book their tickets well in advance) but little business traffic and virtually no cargo (i.e. empty bellies), especially on LR.
In the meantime, MXP has become a kind of "Gulf" airport, with Gulf airlines having taken over the majority of the Milan area traffic towards Asia and Oceania, whilst European airlines continue to carry Milan area passengers all over the world (not so much to Asia) via their hubs departing from LIN. Last but not least, EZY has a good hub at MXP Terminal 2 (and EZY's European service today is absolutely acceptable, especially in relation to the price paid).
It is now too late for AZ to return to MXP, because the market for AZ is simply not there anymore. I personally will not miss AZ, especially after it tried (it is still trying, actually) to prevent EK from operating the MXP-JFK route: AZ does not invest in MXP (actually, AZ has virtually no flights from MXP) but it does not want other carriers to fly from this airport ! I fear however that the Italian state will avoid AZ's bankruptcy at taxpayers' cost (until the next time ... and the next bailout ... and so on ...)


User currently offlineautothrust From Switzerland, joined Jun 2006, 1545 posts, RR: 9
Reply 19, posted (7 months 2 weeks 3 days 7 hours ago) and read 37562 times:

Let AZ die. Since years/decades the airline is in the red. AFAIK since 12 years since being profitable.

Maybe a new airline, better sized (hopefully not fully managed by LH) can turn this.



“Faliure is not an option.”
User currently offlinena From Germany, joined Dec 1999, 10364 posts, RR: 11
Reply 20, posted (7 months 2 weeks 3 days 7 hours ago) and read 37501 times:

Quoting autothrust (Reply 19):
Let AZ die. Since years/decades the airline is in the red. AFAIK since 12 years since being profitable.

Better a painful end than pain without end. Who´s paying for this airline on continuous life support? The public welfare?


User currently offlinemow From Israel, joined Dec 2005, 187 posts, RR: 2
Reply 21, posted (7 months 2 weeks 3 days 6 hours ago) and read 36794 times:

Why is everybody under impression that MIL market is bigger and more important than ROM?
ROM is 15% bigger than MIL (MXP LIN included) traffic-wise and is slightly positive in growtn, whereas MIL is seriously negative. In terms of high-yield traffic volume ROM is only 10% behind MIL and also positive unlike MIL.


User currently offlineindia777 From Italy, joined Mar 2006, 4 posts, RR: 0
Reply 22, posted (7 months 2 weeks 3 days 5 hours ago) and read 36134 times:

The only right way to change the balance of AZ is to move the intercontinental operations from FCO to MXP, mainly the North American operations, because for the business travelers and also because the flight time MXP to North America is less the the FCO-North America due the polar routes.
Then they have to reduce to the minimum the LIN-FCO-LIN operations and transfer the most important international and national routes to LIN into MXP to help to forward the passenger in the MXP operations worldwide.
From the 1th of October there will be a new daily flight to JFK and will be made by Emirates with a 777-300, this means that there is a market to work on it and to catch!

Ciao a tutti!


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 23, posted (7 months 2 weeks 3 days 5 hours ago) and read 36089 times:

Quoting mow (Reply 21):
Why is everybody under impression that MIL market is bigger and more important than ROM?

It's not only Milan. The Lombardy region is by far the most productive in Italy (and it has a population of almost 10 million people). If you add Piedmont, Veneto and Emilia Romagna, it is still one of the most economically developed areas in Europe. Without a direct competition from LIN (for which Milanese people only have to blame themselves, since it is first and foremost Milanese people that want to keep LIN open, being close to the city and thus easy to use) and other "small" Northern airports (now even Brescia wants to have its own!) MXP could develop into an important European airport even without a hub carrier.

I think instead that no airline can be profitable with (only) FCO as a hub, since FCO is simply not able to attract North Italian and European passengers in sufficient numbers (AZ's intercontinental network from FCO is laughable). AZ's fate is the litmus test of this assertion


User currently offlineflyyul From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 24, posted (7 months 2 weeks 3 days 3 hours ago) and read 34973 times:

right so alitalia wasn't bleeding when the Intercont flights were at MXP. When the feederagio flights were losing hundreds of millions - while the high yielding flew straight to LIN.

User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 25, posted (7 months 2 weeks 3 days 2 hours ago) and read 35032 times:

Quoting LAXintl (Thread starter):
Struggling Alitalia has hired investment bank to help tackle a liquidity crisis that may see it running out of cash before the end of the year.

Nothing really new here. CEO G. Del Torchio already announced last July AZ would need € 300 Mi by the end of the year. He did not disclose how the funds would be raised though. It seems it will be done by increasing debt, already at high levels.

Its need in cash increased by € 100 Mi in two months, which may indicate the situation at AZ has deteriorated.

In such a context its aim to break even in 2015 would look like compromised.

AZ is facing a strategic challenge. Its cost base is competitive among the European Legacies but not against the LCCs. Those who claim here that AZ should focus on regional ops only are totally missing the point. AZ cannot compete with FR or U2. Just like LH with Germanwings or IAG with Vueling or AFKL with Transavia, AZ can develop Air One in Europe but this strategy alone will not secure its future. It must develop its long-haul network (Italy has the potential), densify its aircraft "a la KLM" with a less premium heavy fleet, improve the load factor, re-hub FCO efficiently, etc.




Quoting mow (Reply 21):
ROM is 15% bigger than MIL (MXP LIN included) traffic-wise and is slightly positive in growtn, whereas MIL is seriously negative. In terms of high-yield traffic volume ROM is only 10% behind MIL and also positive unlike MIL.

  




Quoting na (Reply 20):
Who´s paying for this airline on continuous life support? The public welfare?

No. The shareholders are. AZ is a privately-owned company.




Quoting mercure1 (Reply 17):
hubing at Malpensa is not feasible as Milan is split into two airports.

  




Quoting AirCanadaA330 (Reply 16):
with the problems at AF, I wonder if they will sell their stake in AZ.


To sell, you need a buyer.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineblueflyer From United States of America, joined Jan 2006, 3701 posts, RR: 2
Reply 26, posted (7 months 2 weeks 3 days ago) and read 34070 times:
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Quoting Azure (Reply 25):
To sell, you need a buyer.

Indeed. The banks that exchanged debt for equity in the 2008 bankruptcy are said to be itching to sell their shares as soon as they'll be allowed to. If Alitalia can't make a deal with its investors for additional cash, who is going to want to buy the banks' shares, let alone Air France's?

Air France has no choice but to hold on to its shares unless it wants to write them off, I think.



I've got $h*t to do
User currently onlineMasseyBrown From United States of America, joined Dec 2002, 5215 posts, RR: 7
Reply 27, posted (7 months 2 weeks 3 days ago) and read 34458 times:

So tired of all the "if we don't get X gazillion by Y date, the sky will fall" stories, but I guess they serve to focus attention.


Consilivm: Cave ne nothi te vexant
User currently offlinespud757 From United Kingdom, joined Nov 2007, 322 posts, RR: 0
Reply 28, posted (7 months 2 weeks 2 days 23 hours ago) and read 33686 times:

Quoting Viscount724 (Reply 6):

Lufthansa Italia?   

Time for AZ to pass. Leave domestic and O&D short haul to the LCCs. LH group, IAG, AF/KL, EK etc will handle the long haul sectors


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 29, posted (7 months 2 weeks 2 days 22 hours ago) and read 33433 times:

Cannot AZ become a TK type carrier which focuses on connecting flights to the Mideast and Africa? Can FCO become the skyteam answer to IST?

User currently offlineflyyul From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 30, posted (7 months 2 weeks 2 days 22 hours ago) and read 33072 times:

AZ needs to focus on long-haul and get into the commodity/leisure traffic business by offering high-density products. I'm sure their longhaul 777 ops with their new density generates returns - why else would Del Torchio want to increase the Longhaul fleet if there was no money being made?

User currently offlineCentre From United States of America, joined Mar 2010, 487 posts, RR: 0
Reply 31, posted (7 months 2 weeks 2 days 21 hours ago) and read 32714 times:

Yawn....
What's new?

Quoting flyyul (Reply 30):
AZ needs to focus on long-haul and get into the commodity/leisure traffic business by offering high-density products. I'm sure their longhaul 777 ops with their new density generates returns - why else would Del Torchio want to increase the Longhaul fleet if there was no money being made?

Maybe a new home,a new management, new flight attendandts, new customer service, and a new attitude would help



I have cut 4 times, and it's still short.
User currently onlineViscount724 From Switzerland, joined Oct 2006, 24075 posts, RR: 22
Reply 32, posted (7 months 2 weeks 2 days 20 hours ago) and read 32335 times:

Quoting miaintl (Reply 29):
Can FCO become the skyteam answer to IST?

Rome is too far south to make a good hub from the rest of Europe except to Africa.


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 33, posted (7 months 2 weeks 2 days 16 hours ago) and read 32096 times:

IST is also too far south, but that does not stop from being a major hub.

User currently offlineusflyer msp From United States of America, joined May 2000, 2026 posts, RR: 0
Reply 34, posted (7 months 2 weeks 2 days 15 hours ago) and read 32073 times:

Quoting miaintl (Reply 33):
IST is also too far south, but that does not stop from being a major hub.

AZ/FCO does not have the benefit of a booming economy, relatively low labour costs, and a host of government policies designed to promote Rome as a transfer hub like TK/IST do.

A better model for AZ to emulate would be that of TP. Figure out a way to economically serve its local markets well (even if they are largely leisure oriented) and exploit your historic ties to develop a niche long-haul network that few other carriers could realistically break into. AZ could be to North Africa (Libya and Algeria) and the Horn of Africa (Ethiopia, Somalia, Eritrea,) as TP is to Brazil and the other Lusophone countries of the world....


User currently offlineHalophila From United States of America, joined Aug 2005, 643 posts, RR: 4
Reply 35, posted (7 months 2 weeks 2 days 15 hours ago) and read 32001 times:

Italy will do just fine without AZ. Having had some major SNAFUs with AZ that have left me thousands out of pocket and delayed for days in the past 10 years, I say good riddance. And I would also say I feel sorry for the employees of the airline who may lose their jobs, but frankly both bad experiences have been the result of going "in stretto" (on strike) for better pay, which the AZ employees seem to do on a dime. Sorry to sound negative, but inefficiency breeds inefficiency...


Flown on 707, 717, 727, 732 733 734 735 73G 738 739 741 742 743 744 74SP 757 753 762 763 772 773 77W D10 DC9 M11 M80 M87
User currently offlineIndianicWorld From Australia, joined Jun 2001, 2782 posts, RR: 0
Reply 36, posted (7 months 2 weeks 2 days 13 hours ago) and read 31823 times:

Quoting usflyer msp (Reply 34):
A better model for AZ to emulate would be that of TP. Figure out a way to economically serve its local markets well (even if they are largely leisure oriented) and exploit your historic ties to develop a niche long-haul network that few other carriers could realistically break into. AZ could be to North Africa (Libya and Algeria) and the Horn of Africa (Ethiopia, Somalia, Eritrea,) as TP is to Brazil and the other Lusophone countries of the world....

I don't think Italy really has the levels of linkage as TP can gain from its markets.When I look at those options, Brazil has been a great boost for TP, given its economic rise over the past decade, which has helped it greatly in its efforts to strengthen its market position.

AZ has over the years been a global carrier, flying to far flung places (ie. MEL/SYD) in search of supporting the Italian diaspora, although unfortunately this was not a viable way forward. Trying to tap into the links it can in Africa may well be a struggle too.

Quoting usflyer msp (Reply 34):
AZ/FCO does not have the benefit of a booming economy, relatively low labour costs, and a host of government policies designed to promote Rome as a transfer hub like TK/IST do.

All valid points.


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 37, posted (7 months 2 weeks 2 days 12 hours ago) and read 31634 times:

Save for a brief period when AZ had its main airport at MXP (but many flights and all personnel were left at FCO), AZ has always had its hub at FCO and it has never worked, since AZ has always failed to attract an adequate number of passengers from Northern Italy (let alone Europe!), whilst local demand is not sufficient to sustain a hub: I don't understand why this strategy (i.e. hub at FCO) should work now (and in fact it is not working), when there is fiercer competition than in the past. The only difference is that in the past AZ was a state-owned airline that was "allowed" to lose money, and therefore it didn't really matter if FCO didn't work as hub

User currently offlinena From Germany, joined Dec 1999, 10364 posts, RR: 11
Reply 38, posted (7 months 2 weeks 2 days 11 hours ago) and read 31596 times:

Who the hell is backing this money drain? To dump state aid into a company over such a long period is illegal in the EU, and no bank will support such a hopeless creditor if there isnt a backdoor. To whats the trick?

User currently offlineautothrust From Switzerland, joined Jun 2006, 1545 posts, RR: 9
Reply 39, posted (7 months 2 weeks 2 days 8 hours ago) and read 31366 times:

Quoting Viscount724 (Reply 6):
Agree. Switzerland is doing just fine without Swissair

Disagree strongly , now Lufthansa controls everything and tells LX what to do , even what planes they have to buy or will get.

Many people inside LX are not happy about the German Style of doing business and how many high ranking jobs got lost to germans.

The overall quality has also declined.



“Faliure is not an option.”
User currently offlineIndianicWorld From Australia, joined Jun 2001, 2782 posts, RR: 0
Reply 40, posted (7 months 2 weeks 2 days 8 hours ago) and read 31314 times:

^^ From my dealings with Swiss and German businesses, I found some linkages in their style and thinking.They certainly aren't at polar differences in their management styles that's for sure.

The current Swiss operation is well run and doing fairly well financially. This is a big step up from the nature of the management (mismanagement) of the latter point in SR's history, especially the buying spree that it embarked on (Qualifyer Alliance anyone??).

Whether it be majority German or Swiss controlled, Switzerland has a global airline based in its country and with thousands of employees in a job thanks to the airlines success.

AZ could only dream to be in that position right now.


User currently offlinena From Germany, joined Dec 1999, 10364 posts, RR: 11
Reply 41, posted (7 months 2 weeks 2 days 8 hours ago) and read 31266 times:

Quoting autothrust (Reply 39):
Many people inside LX are not happy about the German Style of doing business and how many high ranking jobs got lost to germans.

No one is really happy if the rich uncle from abroad takes over. Thats not a LH vs. Swiss problem. I see that in the end both are doing rather fine together. Lets be honest, without LH many of those who are whining now would be without a job.

Quoting IndianicWorld (Reply 40):
The current Swiss operation is well run and doing fairly well financially. This is a big step up from the nature of the management (mismanagement) of the latter point in SR's history, especially the buying spree that it embarked on (Qualifyer Alliance anyone??).

Right.

Quoting IndianicWorld (Reply 40):
AZ could only dream to be in that position right now.

Sure, but who so stupid to invest in this money grave? Let them die, the agony lasts much too long. All said, AZ employees are partly living from the public welfare, only at higher wages. That is ok for 2 or 3 years, but AZ is a hopeless case, even the blindest politician should be able to see that.


User currently offlineIndianicWorld From Australia, joined Jun 2001, 2782 posts, RR: 0
Reply 42, posted (7 months 2 weeks 2 days 7 hours ago) and read 31237 times:

^^ Fully agree. I certainly wasn't advocating for AZ to be a great investment.

I think the only way forward will be for tough decisions to be made and that may well need drastic action like seen at Swiss. The last attempt to transform AZ didn't work so let's wait and see what comes of this. One thing is for sure, it will likely get messy.


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7257 posts, RR: 17
Reply 43, posted (7 months 2 weeks 2 days 7 hours ago) and read 31239 times:

Quoting miaintl (Reply 33):
IST is also too far south

IST is close to the CDG-DXB great circle route and DXB has already more than proved itself as a hub between Europe and the Indian sub-continent, the Far East and Australasia. No part of Italy lies under that great circle route that crosses southern Germany, Austria, Serbia, Bulgaria and, of course, Turkey.

FCO is close to the great circle route between CDG and DAR. It is therefore well positioned as a hub to Africa but, compared to IST, is too far south for the majority of destinations served by the well established DXB or the developing IST hubs.

Personally the only time I have used FCO as a hub was when routing LHR-FCO-CAI. I unfortunately used AZ. Even though it turned out that both flights were consecutive flights operated by the very same aircraft, at check-in at LHR AZ refused to check my baggage to CAI. I had to collect it and re-check it at FCO. Thus, at least in my eyes, AZ eliminated any thoughts I may of had of using FCO as a hub again. If this experience was not isolated then it is one of the reasons why AZ management has failed to turn AZ round.


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 44, posted (7 months 2 weeks 2 days 3 hours ago) and read 30928 times:

Is it to late for AZ to move its hub operations to MXP now?

User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 45, posted (7 months 2 weeks 2 days 3 hours ago) and read 30889 times:

Quoting miaintl (Reply 44):
Is it to late for AZ to move its hub operations to MXP now?

Moving the hub to MXP will only replicate the previous disaster.

With Linate being the primary domestic and Europe airport of choice for Milan, AZ would be hard pressed to get people to utilize MXP for such flying. Result would be like last time, they would have to discount fares out of MXP compared to LIN, or hope to fill enough lower yield connection flow traffic to support the volume of flights needed to make a hub function. Either way its not a good result financially at the end.

Atleast with FCO, they have everything under 1-roof, at a single airport which they can call a hub.


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 46, posted (7 months 2 weeks 2 days 3 hours ago) and read 30868 times:

Quoting miaintl (Reply 44):
Is it to late for AZ to move its hub operations to MXP now?

AZ will never move back to MXP since (i) it is a "Roman" company and it is "politically" obliged to remain at FCO (when it moved to MXP, it was more a pretence than a real move); (ii) AF, which de facto controls AZ from an operational point of view, doesn't want MXP to develop, since it is a competitor of CDG and AMS: AF/KL have in fact moved from MXP to LIN ALL of their flights to CDG and AMS, with the intent of siphoning passengers of the Milan area, bringing them to their hubs and from there around the world (BA and LH substantially do the same, though they have flights also at MXP: logically everyone follows its interests); (iii) in any case, a move to MXP would be successful only if LIN were closed or at least substantially curtailed, but this will never occur also due to shortsighted Milanese people who prefer to have a (really bad) airport ("landing strip" would be a more appropriate term) close to the city rather than a "true" airport (MXP), which is certainly farther but which, if properly exploited, could become an important player in the European scenario.


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 47, posted (7 months 2 weeks 2 days ago) and read 30619 times:

But would not a MXP hub compliment CDG and AMS instead of stealing passengers from them? Would it not strengthen the skyteam alliance if they have a strong central European hub in MXP? Why would AF possibly be against that?

User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 48, posted (7 months 2 weeks 1 day 23 hours ago) and read 30535 times:

Quoting miaintl (Reply 29):
Cannot AZ become a TK type carrier which focuses on connecting flights to the Mideast and Africa? Can FCO become the skyteam answer to IST?

Problem is, AZ is no TK.

TK for all purposes is a LCC when it comes to cost. Per a investor presentation its cost base is only 60% of AEA member airline averages. Also TK has lots of other benefits including a strong and upcoming home market with high market share compared to stagnant Italy, and also enjoy great national support from a nation that is looking to grow and support the airline sector.

At the end, TK can cover flying on much less revenue than what AZ gets.

Quoting miaintl (Reply 44):
Is it to late for AZ to move its hub operations to MXP now?

Been there, done that.

Result was also massive losses.

Quoting miaintl (Reply 47):

But would not a MXP hub compliment CDG and AMS instead of stealing passengers from them? Would it not strengthen the skyteam alliance if they have a strong central European hub in MXP? Why would AF possibly be against that?

Sure for Skyteam a Milan hub might look interesting, but the realities of two (3 if you count LCC BGY) airports, makes the proposal not a viable one for AZ to execute on.



From the desert to the sea, to all of Southern California
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 49, posted (7 months 2 weeks 1 day 18 hours ago) and read 30288 times:

Then whats your solution for AZ, if you even have any? An FCO hub is not profitable either.

User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7209 posts, RR: 3
Reply 50, posted (7 months 2 weeks 1 day 12 hours ago) and read 30102 times:

Could AZ fly more routes from LIN, or is that also a non starter.

User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 51, posted (7 months 2 weeks 1 day 12 hours ago) and read 30127 times:

Quoting miaintl (Reply 47):
But would not a MXP hub compliment CDG and AMS instead of stealing passengers from them? Would it not strengthen the skyteam alliance if they have a strong central European hub in MXP? Why would AF possibly be against that?

Tell this to AF, who have always staunchly opposed MXP (and they would oppose MXP's development even if LIN were closed: for them the ONLY thing that matters is taking passengers to CDG and AMS, especially in these times when also AF/KL are struggling). BGY is not really a problem since it is mostly a low-cost airport (basically a FR airport)


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 52, posted (7 months 2 weeks 1 day 4 hours ago) and read 29931 times:

Quoting RGFC (Reply 46):
Milanese people who prefer to have a (really bad) airport ("landing strip" would be a more appropriate term) close to the city rather than a "true" airport (MXP),

But that landing strip is an excellent place and extremely convenient.

I give you example. I land in LIN, and am in my Milan destination in about 15min with taxi €18.
Same trip from MXP be 1-hour taxi ride and cost close to €100

Quoting miaintl (Reply 49):
Then whats your solution for AZ, if you even have any?

I think FCO or die.

AZ CEO says they want to grow longhaul flying which appears profitable, and restructure FCO schedules into better bank schedules. Lets see how results are in a few years.

Quoting bennett123 (Reply 50):
Could AZ fly more routes from LIN, or is that also a non starter.

LIN is maxed out with slots.

AZ however is adding more LIN destinations by shuffling slots around as trains are eating into domestic service demand.

I know however other airlines are anxious to grow at LIN also, so any free slots be taken fast.


User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7209 posts, RR: 3
Reply 53, posted (7 months 2 weeks 1 day 4 hours ago) and read 29884 times:

There is what appears to be a second (short) runway west of the main runway), could that be extended?.

User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 54, posted (7 months 2 weeks 1 day 2 hours ago) and read 29760 times:

Quoting mercure1 (Reply 52):
I think FCO or die.

At FCO AZ will probably die (although I agree that there aren't really any alternatives to FCO without closing LIN).
They are currently losing about 2 million Euros a day, they have changed management and strategies countless times in these years, but the results just keep getting worse and worse.
What makes me angry is that the bailout of the "old" AZ cost so much money to taxpayers in order to allow the "new" AZ to start, only to see it going bust after just a few years: what an incredible waste of money ! No wonder many Italian residents don't like AZ ...


User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 55, posted (7 months 2 weeks 1 day 2 hours ago) and read 29705 times:

Quoting miaintl (Reply 49):
Then whats your solution for AZ, if you even have any? An FCO hub is not profitable either.

AZ is left with a whole bunch of bad choices, but moving to an isolated MXP hub is even worse then staying with FCO.

Rome atleast one of the worlds largest travel destination markets, and also Italy's busiest airport (30% larger than MXP+LIN combined).



From the desert to the sea, to all of Southern California
User currently offlinealfa164 From United States of America, joined Oct 2012, 304 posts, RR: 0
Reply 56, posted (7 months 2 weeks 1 day 1 hour ago) and read 29668 times:

Quoting blueflyer (Reply 15):
My guess is, unless Etihad invests (which I doubt), somehow it is back to 2008.


I don't doubt. Word in Abu Dhabi (I am here now) is that EY will be investing, as a part of their strategy to establish European hubs by acquiring interests in airlines (think: Air Berlin, Air Serbia [nee JAAT]) and funneling their passengers throughout the continent through those airports.

It effectively gives them intra-European flying rights without actually having them. Time will tell how well it works.


User currently offlineenilria From Canada, joined Feb 2008, 6838 posts, RR: 14
Reply 57, posted (7 months 2 weeks 1 day 1 hour ago) and read 29615 times:

Quoting LAXintl (Thread starter):
The move is aimed at finding ways to raise more than EUR€400 million to keep the loss-making carrier afloat, according to sources.
Quoting TheCommodore (Reply 1):
It will have to be someone very brave, who's not scared of taking risks.

Brave? The kind of brave where you rush toward a bunch of guys firing machine guns wearing a towel and brandishing a bar of soap?

Quoting usflyer msp (Reply 2):
When is AZ NOT facing a cash crisis?

Nail---head

Quoting mercure1 (Reply 3):

I suspect the white knight this time might be EY:
Alitalia In Talks With Etihad Over Stake

Yes, the kind of white knight unconcerned with financial results.

Quoting PHX787 (Reply 8):

Alitalia needs to sever all international routes and focus on the regional routes. Let DL or other Skyteam members handle the Rome-overseas routes.

And you know somehow that the domestic routes make money?

Quoting usdcaguy (Reply 11):
I have always wondered whether AZ should have retained its hub at MXP in lieu of moving it to FCO, and if that move has had anything to do with the carrier's fortunes.

It certainly didn't help things.

Quoting na (Reply 20):
Who´s paying for this airline on continuous life support? The public welfare?

Everybody seems to be including alliance investors, the govt, the taxpayer, investors, etc.

The geography of Italy is such that I think their days are numbered as a gateway hub, although IST serves a similar role with better economics (and labor costs).


User currently offlinePHX787 From Japan, joined Mar 2012, 6942 posts, RR: 18
Reply 58, posted (7 months 2 weeks 1 day ago) and read 29564 times:

Quoting enilria (Reply 57):
And you know somehow that the domestic routes make money?

Well they need to restructure themselves as something like Vueling. In my opinion.



One of the FB admins for PHX Spotters. "Zach the Expat!"
User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 59, posted (7 months 2 weeks 1 day ago) and read 29519 times:

Quoting blueflyer (Reply 26):
Indeed. The banks that exchanged debt for equity in the 2008 bankruptcy are said to be itching to sell their shares as soon as they'll be allowed to. If Alitalia can't make a deal with its investors for additional cash, who is going to want to buy the banks' shares, let alone Air France's?

Air France has no choice but to hold on to its shares unless it wants to write them off, I think.

Agreed. Actually there is a big question mark on the € 400/500 Mi loan that AZ wants to obtain. What guarantees will it be giving in exchange of the funds ? Will it be a convertible loan, which would imply that the shareholders including AFKL have accepted to dilute their equity ?
In any case AFKL needs to clarify its strategy. The lock-up period during which AFKL can exercise its pre-emption rights to buy the shares of the other shareholders will expire in mid-October. Rather sooner than later AFKL will have to report to its own shareholders what it intends to do with the several hundreds of millions Euros in AZ. Is it taking the risk to let AZ end up into the hands of a competitor, is it willing to dilute its share in a capital increase, or is it simply ready to write-off the shares in case AZ goes bankrupt again ?



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 60, posted (7 months 2 weeks 23 hours ago) and read 29466 times:

Quoting LAXintl (Reply 55):
AZ is left with a whole bunch of bad choices, but moving to an isolated MXP hub is even worse then staying with FCO.

Rome atleast one of the worlds largest travel destination markets, and also Italy's busiest airport (30% larger than MXP LIN combined).

  



Quoting alfa164 (Reply 56):
Word in Abu Dhabi (I am here now) is that EY will be investing, as a part of their strategy to establish European hubs by acquiring interests in airlines (think: Air Berlin, Air Serbia [nee JAAT]) and funneling their passengers throughout the continent through those airports.

But does EY really need to invest in AZ for this ? As you rightfully noted, EY has already a stake in Air Berlin. Per EU regulations any EU based carrier can fly any European route (in other words Europe is entirely deregulated for EU based carriers). Furthermore its codeshare agreement with AZ makes it already possible for EY to funnel through FCO pax to 17 destinations in Europe (Athens, Barcelona, Belgrade, Bucarest, Budapest, Frankfurt, Geneva, Madrid, Malaga, Malta, Milan, Munich, Sofia, Tirana, Venice, Vienna and Zurich).
EY may decide that Italy is a strategic market but I have more and more doubts on its intention to purchase AZ : if they were in such advanced talks why would AZ need a bank to help find a loan ?



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 61, posted (7 months 2 weeks 21 hours ago) and read 29316 times:

In the end of the day it seems Italy does not have a viable hub anywhere, whether in FCO or MXP. Which leads me to conclude that they must stop with this longhaul hub nonsense and focus on being merely a regional feeder carrier.

User currently onlineViscount724 From Switzerland, joined Oct 2006, 24075 posts, RR: 22
Reply 62, posted (7 months 2 weeks 21 hours ago) and read 29314 times:

Quoting autothrust (Reply 39):
Quoting Viscount724 (Reply 6):
Agree. Switzerland is doing just fine without Swissair

Disagree strongly , now Lufthansa controls everything and tells LX what to do , even what planes they have to buy or will get.

Many people inside LX are not happy about the German Style of doing business and how many high ranking jobs got lost to germans.

The overall quality has also declined.

I was referring to the country and the economy, not internal LX matters. I don't think the Swiss economy (tourism, business travel etc.) is any worse off since Swissair was replaced by Swiss.

The cost of providing the former quality of service was too high, considering how competitive the airline industry is now. That's one (of many) reasons why Swissair no longer exists. Very few carriers matched their service quality, but that didn't help Swissair survive as few people are now willing to pay higher fares for a higher standard of service.

[Edited 2013-09-06 15:20:51]

User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 63, posted (7 months 4 days 4 hours ago) and read 28491 times:

Story that says AZ is need of fast cash injection as it burning through €95mil since July.

Board of directors will meet on September 26th to explore options including possible a quick €100mil injection by Etihad as oxygen lifeline as part of the existing commercial agreement between companies while more expansive options are considered.
Also the company will apparently seek to adjust its existing debts with 4 large banks.

http://www.lagenziadiviaggi.it/notiz...php?IDNotizia=172199&IDCategoria=1


This could turn out to be interesting winter for AZ.


User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 64, posted (7 months 4 days 3 hours ago) and read 28349 times:

Yes sounds like it could be a challenging winter for AZ.

Besides its own internal issues, external issues like continued stagnant European economy, and high fuel cost weigh down performance even more.



From the desert to the sea, to all of Southern California
User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 65, posted (7 months 4 days 2 hours ago) and read 28254 times:

AZ's situation is quite desperate. Its shareholders counted on AF buying AZ after the end of the lock-up period, but AF is also cash-strapped and thus it is unlikely that it will embark on a new investment. The only hope is EY, which however cannot purchase a majority share in AZ and thus it should act in coordination with AF (not unlikey however, since AF and EY are already partners).
The only sensible thing for AZ would be to concentrate on long-haul flights from MXP, but this would be possible only if LIN were closed (0% chances of this happening) and anyway it would probably be too late: AZ's space at MXP has been largely taken over by other airlines since AZ moved to FCO.
AZ is therefore stuck at FCO, which has never worked as a hub. Actually, even ADR (the company managing FCO) is starting to get tired of AZ and is seeking also other airlines to develop the airport business.
Scenarios ? Either AZ will simply go bankrupt or it will be eventually taken over by EY + AF thereby becoming a mere "satellite" airline with a limited network (basically mainly to serve CDG and AMS from Italian airports, as it already does, and AUH from MXP and FCO, i.e. to fly passengers to other airlines' hubs).


User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 66, posted (7 months 4 days 1 hour ago) and read 28122 times:

Quoting RGFC (Reply 65):
Its shareholders counted on AF buying AZ after the end of the lock-up period, but AF is also cash-strapped and thus it is unlikely that it will embark on a new investment.

I agree that AF is unlikely to further invest in AZ, but AF is not that cash-strapped : it still has over € 4 billion in cash and a pretty comfortable amount of unused credit lines. In other words AF could find a way to purchase AZ if it wanted to.
However, since former CEO JC Spinetta left, the majority of the board is against a take-over. AF is now more willing to invest where there is growth (for instance it has expressed its interest in creating a pan-african carrier).

Back to AZ, it is embarked in a vicious circle : it needs cash, but because of its limited assets and its low revenue (which seems to worsen), it has no other option but to contract more loans on and on which further increase its debt and compromise its financial health.

Now it is a question of will. Either AZ finds a way to stop urgently its loss making ops (mainly on the domestic and European network) or it will go bankrupt again.

We will see if EY accepts to inject €100 Mi but we already know it will not be sufficient to save AZ : it was looking for € 400/500 Mi a couple of weeks ago... In any case I do not expect that EY invest one Euro cent in AZ if it has no assurance that it will have a free hand to turn it into a profitable airline !



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 67, posted (7 months 1 day 23 hours ago) and read 27457 times:

According to Bloomberg, Air France board will meet next week to "decide whether to bid for control of Alitalia by the end of this year."


Air France to decide Alitalia stake next week
http://uk.reuters.com/article/2013/0...ia-airfrance-idUKL5N0HF36R20130919

=



From the desert to the sea, to all of Southern California
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 68, posted (7 months 1 day 18 hours ago) and read 27080 times:

Well they have 3 choices.

1) Exercise their option to take bigger stake or even majority control of AZ.
2) Do nothing and possibly watch their equity stake dilute if someone else buys into AZ
3) Match other equity stake investment to keep current share holding percentage.


But with current bad news regarding AF own situation, I don't think many parties in France would like to see money go to AZ when AF own standing is shaky.


User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 69, posted (7 months 1 day 12 hours ago) and read 26878 times:

Quoting LAXintl (Reply 67):
According to Bloomberg, Air France board will meet next week to "decide whether to bid for control of Alitalia by the end of this year."

This was expected (see my post #59).

A more complete article (in French) : http://www.latribune.fr/entreprises-...-de-verite-sonne-sur-alitalia.html




Quoting mercure1 (Reply 68):
Well they have 3 choices.

1) Exercise their option to take bigger stake or even majority control of AZ.
2) Do nothing and possibly watch their equity stake dilute if someone else buys into AZ
3) Match other equity stake investment to keep current share holding percentage.

  
Option 1 is rather unlikely, unless the totality or at least a large part of the € 1 bn debt of AZ is written off. This abysmal debt is the major obstacle for an takeover by AF.
Option 2 is possible but would not be a very clever decision on a strategic level
Option 3 would be a good compromise and would not require AFKL to spend too much cash (probably between € 75 - 100 Mi)



[Edited 2013-09-20 00:17:10]


I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 70, posted (7 months 1 day 9 hours ago) and read 26555 times:

If AZ does not go banlrupt then what would be its strategy for the future? Having a hub at MXP?

User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1323 posts, RR: 1
Reply 71, posted (7 months 1 day 8 hours ago) and read 26462 times:

Quoting Azure (Reply 66):
In any case I do not expect that EY invest one Euro cent in AZ if it has no assurance that it will have a free hand to turn it into a profitable airline !

I suspect that if EY provides any cash to AZ it will be in a very prudent way with the downside protected - e.g. by loaning money secured against, say, AZ's LHR slots. That way if AZ goes down and can't repay the loan, EY ends up with useful assets.

I fear the future for AZ is not good:

1. I don't think Italy (the populace and business community) really needs AZ - plenty of other airlines can and do provide good (better than AZ?) service to Italian destinations. Any viable/profitable void will quickly be filled.

2. IMHO AF/KL would be mad to take on ownership and control of AZ - they will end up pouring money in. They have more than enough issues close to home to worry about first.

3. If AZ could not be profitable previously (whether from FCO or MXP) then it will be even more difficult now with ever more efficient competitors in all segments / all directions.

My prediction sell/mortgage/borrow against any remaining assets to desperately raise cash before collapsing - and I do feel very sorry for the staff in this circumstance.



Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,BA11,BU31,B190, B461,B462,B463,(..50 types..),VC10,WESX
User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 72, posted (7 months 1 day 7 hours ago) and read 26316 times:

Quoting miaintl (Reply 70):
Having a hub at MXP?

This could work only if LIN were closed, which will not happen (maybe it will be somewhat reduced, but certainly not closed because Milanese folks want that aiport).
Additionally, AZ used to operate some routes from MXP that have now been successfully taken over by other (better) airlines, such as HKG by CX, PVG by CA and especially DXB by EK (that will also add JFK in about ten days)


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 73, posted (7 months 1 day 3 hours ago) and read 26165 times:

I'm sure people in Hong Kong wanted Kai Tak to remain open since it was closer to the business center of Hong Kong, but that did not stop the airport from closing. Are the Milanese really that short-sighted and lazy when it comes to driving a couple extra miles out the city, that they would at all costs keep their crappy little airstrip (LIN) open over having a world-class facility at MXP that can truly compete on the global level? If AZ goes down the ones with the most to lose will be people living in the South of Italy, since AZ is the only legacy carrier that flies to those destinations, the rest being lowcost budget carriers. BA, AF, KL and LH do not send their metal to points south of Rome, so if AZ goes down the South of Italy will be left without a proper airline to serve its population. The North will be fine since all cities north of Rome are well served by all the Euro Heavies.

User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 74, posted (7 months 1 day 2 hours ago) and read 26092 times:

Quoting Azure (Reply 69):

I think none of options for AF are not very good while having its own continued distractions.

Be interesting how its board reacts, and how public/union react in return.

Quoting miaintl (Reply 73):
Are the Milanese really that short-sighted and lazy when it comes to driving a couple extra miles out the city, that they would at all costs keep their crappy little airstrip (LIN) open over having a world-class facility at MXP that can truly compete on the global level?

Have you used either LIN or MXP?

First MXP is hardly world class. I have been to better airports in Africa!

Yes LIN might not be the prettiest but is functions very well, and is extremely convenient for Milanese population and visitor.

For example -- from MXP for a taxi to Milan city limits its €90 flat fee and maybe 1+ hour. LIN, my last trip was barely €15 and 10 minutes.

Simply put LIN is probably one of the most convenient airports in Europe, not too different then how Orly serves Paris. No need to go out to CDG.

Maybe you would understand analogy of forcing clients in Miami to go all the way to PBI airport, or across everglades to Naples when you have MIA only minutes from downtown.


User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 75, posted (7 months 23 hours ago) and read 25908 times:

According to La Tribune, a reputable French business newspaper, AFKL would be willing to increase its stake in Alitalia up to 50% on the occasion of a capital increase. Nevertheless, the offer would include strict conditions: (a) AF should not assume AZ debt ; (b) it should obtain guarantees on the financing of the industrial plan it finds too ambitious; (c) it should acquire more strategic influence.
AFKL board members have to give their approval. They would meet on Sept. 23rd.
AFKL has declined to comment these "rumors".

Story : http://www.latribune.fr/entreprises-...alitalia-mais-sous-conditions.html




Quoting GCT64 (Reply 71):
I suspect that if EY provides any cash to AZ it will be in a very prudent way with the downside protected

Certainly. A bid would include conditions. This could be said for any investor. AF knows this and seems willing to take advantage of the situation. For the moment EY is keeping a very low profile, probably to give AF a free hand to negotiate.



Quoting mercure1 (Reply 74):
I think none of options for AF are not very good while having its own continued distractions.

If all the conditions put by AF are met, and the deal accepted by the various authorities, I'd say it could be a good deal !



Quoting mercure1 (Reply 74):
Be interesting how its board reacts, and how public/union react in return.

Agreed. We'll see !

[Edited 2013-09-20 13:46:46]


I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 76, posted (7 months 20 hours ago) and read 25708 times:

Quoting mercure1 (Reply 74):

But how did the people in Hong Kong feel when the more convenient Kai Tak closed and was replaced with the new airport miles away from the city?


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 77, posted (7 months 4 hours ago) and read 25539 times:

Quoting miaintl (Reply 76):
But how did the people in Hong Kong feel when the more convenient Kai Tak closed and was replaced with the new airport miles away from the city?

You really are beating a dead horse by going around and around on the same subject.

But reality is what reality is. LIN is the primary domestic and European capital service airport for Milan. End of story.

Maybe in 50-years things will change if Italian citizens want otherwise, but for now the airport is reality and very much exist in the calculus.


Anyhow your HKG analogy is not very good. First they replace entire single airport with another, unlike Milan which has 3 airports already basically, then on top of it, new HKG airport is not 1-hour from city like MXP, more like 25-mins.

A better example for you to review is what happened in Montreal when in late 1970s they try to force everyone from city Dorval airport to newly built what was to be a model airport of Mirabel located outside in the countryside. So Dorval is closed, but by 1990s as its so unpopular with airlines and travelers they reversed things reopen convienent Dorval and now Mirabel is the one closed to airlines. Amazing waste by Canadian government


User currently onlineMasseyBrown From United States of America, joined Dec 2002, 5215 posts, RR: 7
Reply 78, posted (7 months 3 hours ago) and read 25503 times:

Quoting Azure (Reply 75):
If all the conditions put by AF are met, and the deal accepted by the various authorities, I'd say it could be a good deal !

A good deal, except perhaps for AirFrance. I believe AF would be smarter to establish an Italian subsidiary, à la Air Dolomiti, and expand it as opportunities (the end of Alitalia?) arise. Even if the subsidiary were a failure, there would at least be assets to recover, unlike their investment in Alitalia.

[Edited 2013-09-21 10:16:26]


Consilivm: Cave ne nothi te vexant
User currently offlinePanHAM From Germany, joined May 2005, 8740 posts, RR: 28
Reply 79, posted (7 months 3 hours ago) and read 25466 times:

Quoting mercure1 (Reply 77):
So Dorval is closed, but by 1990s as its so unpopular with airlines and travelers they reversed things reopen convienent Dorval

slight correction, Dorval was never closed, they split domestic (Dorval) and international (Mirabel) which was the mistake in first place since it took connectivity away from Montreal.

Airlines changed their prime Eastern Canadian destination to Toronto and Montreal lost that business quicker than they could say Quebec.

Latest since then the aviation world lknows that split hubs do not work and hubs that work need to be close to the catchment area and not some remote site in the voodoos.

Italy is in a particular bad situation with their airport system as the business is in the northern part of the country served by a number of airports, most of which are too close to the potential MXP hub to make connecting flights viable but road access is not feasible either.

It was mentioned that Italy does not need AZ which is true since the big 3 in Europe offer easy connections through their hubs, best and closest by is MUC.

In that situation AZ is a bottomless pit and will stay that way.



I'm not fishing for compliments
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 80, posted (7 months 1 hour ago) and read 25299 times:

The South of Italy as no access to any major european hub apart from FCO. The big three dont fly to any destinations south of Rome.

User currently onlineViscount724 From Switzerland, joined Oct 2006, 24075 posts, RR: 22
Reply 81, posted (7 months ago) and read 25199 times:



MUC is a major European hub and LH has nonstop service between MUC and quite a few points south of FCO. PMO, CTA, BRI, NAP to name four. There are probably more.
Quoting miaintl (Reply 80):
The South of Italy as no access to any major european hub apart from FCO. The big three dont fly to any destinations south of Rome.


[Edited 2013-09-21 12:52:20]

User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 82, posted (6 months 4 weeks 1 day 23 hours ago) and read 25180 times:

Lets see....

BA serves Catania and Naples year around. They also do Bari, Palermo and Olbia in the summer.

As mentioned LH also has links to Southern Italy.

Brussels Airlines connect BRU with Palermo, Naples, Catania

SAS has link between CPH, OSL and ARN with PMO.

OS connects VIE with PMO, NAP, CTA

Swiss serves Catania from both GVA and ZRH and Bari from ZRH.

I did not bother to look at AF, but suspect they also have a few flights south.


Then add in the many other European airlines like Air Berlin, EasyJet, etc that also link Southern Italian cities with majot European cities including Frankfurt and London.



From the desert to the sea, to all of Southern California
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 83, posted (6 months 4 weeks 1 day 22 hours ago) and read 25050 times:

The frequencies to the south is very poor. Also BA flies from LGW to those destinations not LHR. LH only flies to NAP in the south. The only option for someone living in the south of Italy to fly longhaul is AZ!

User currently onlineViscount724 From Switzerland, joined Oct 2006, 24075 posts, RR: 22
Reply 84, posted (6 months 4 weeks 1 day 21 hours ago) and read 24990 times:

Quoting miaintl (Reply 83):
LH only flies to NAP in the south. The only option for someone living in the south of Italy to fly longhaul is AZ!

Please read Reply 81. LH has service from MUC to quite a few points in southern Italy apart from NAP. I'm sure many of those passengers make longhaul connections to the dozens of daily longhaul flights at MUC.


User currently offlinelaca773 From United States of America, joined Nov 2004, 3945 posts, RR: 2
Reply 85, posted (6 months 4 weeks 1 day ago) and read 24548 times:
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It really seems like things are not going to fair well for AZ.
It sounds like everytime when they are infused with millions more to help them stay afloat, it goes right down the toilet.
Would it be better, if they were to file for bankruptcy, similar to what SR (LX) did, and start from scratch. It just seems like they are in a situation where there is no way out. Very, very sad.


User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 86, posted (6 months 4 weeks 23 hours ago) and read 24498 times:

Quoting laca773 (Reply 85):
Would it be better, if they were to file for bankruptcy, similar to what SR (LX) did, and start from scratch.

That what they did in 2008.

A new company was formed and recapitlized (€1 billion) by the government and investors money, while the old debts and much unneeded overhead and thousands of employees were left behind to die with the old company.

Fast forward 5-years the "new" Alitalia has dug itself a new deep hole and basically is back in the same dire spot.



From the desert to the sea, to all of Southern California
User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 87, posted (6 months 4 weeks 7 hours ago) and read 24155 times:

An interesting article from Corriere della Sera in English : Air France Manoeuvres and Alitalia's Future as Regional Airline
Furthermore, according to Union sources, AF board members will meet today at 6PM Paris time to decide on the stake in AZ.
A press conference is expected tomorrow (when AF unveils its new Y product).



Quoting LAXintl (Reply 86):
Fast forward 5-years the "new" Alitalia has dug itself a new deep hole and basically is back in the same dire spot.

Your statement is financially true, although AZ has improved in 5 years : its cost structure has been lowered, its fleet renewed, its performance (punctuality and on-board service) brought on par with the other European Legacies standards. But all this is not enough to make it profitable. It should have taken into account (a) the growth of the LCCs by downsizing its regional ops and (b) the European economic slowdown by turning its long-haul fleet into a less premium heavy configuration.



Quoting MasseyBrown (Reply 78):
A good deal, except perhaps for AirFrance. I believe AF would be smarter to establish an Italian subsidiary, à la Air Dolomiti, and expand it as opportunities (the end of Alitalia?) arise. Even if the subsidiary were a failure, there would at least be assets to recover, unlike their investment in Alitalia.

Air Dolomiti is hardly a success and there is no sign of it being profitable. Another example you could have given is Lufthansa Italia, but it leaves only the memory of a failed experiment. This should lead us to conclude that in Europe it is very difficult to start an airline from scratch especially on such large a market as Italy.
As for AF, it was ready five years ago to spend up to € 2 Bn to take control of AZ. It is now in a position to reach the same goal for a little fraction of this price! Whether AF is willing to take this opportunity is another story though.

[Edited 2013-09-23 06:08:38]


I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1323 posts, RR: 1
Reply 88, posted (6 months 4 weeks 6 hours ago) and read 23981 times:

Quoting Azure (Reply 87):
its cost structure has been lowered, its fleet renewed, its performance (punctuality and on-board service) brought on par with the other European Legacies standards. But all this is not enough to make it profitable.

If we are referring purely to EU short-haul, then matching the best of the legacies is, unfortunately, not good enough because none of them, despite all their efforts, are making money on short-haul. So even being "as good and efficient as LH" or "as good and efficient as BA" (despite being a great achievement) is not enough, one has to have the lucrative long-haul network connecting into your EU short-haul - and it is difficult to see AZ having a large enough, viable, lucrative long-haul network to make the short-haul business work.

If I was the AF board, I wouldn't touch AZ (unless there are some assets I don't see and understand (e.g. slots) and the price is so low to make the numbers add up - but even then one would have to enact serious surgery pretty quickly to avoid losing all the deal value in on-going operational losses). I don't like sounding pessimistic, but I just can't see a rosy future for AZ.



Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,BA11,BU31,B190, B461,B462,B463,(..50 types..),VC10,WESX
User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 89, posted (6 months 4 weeks 3 hours ago) and read 23783 times:

Italian transport minister says Italy would support AF taking stake to 50% or more.

However inside AFKL boardroom there seems to be disagreement with Dutch members and unions opposing raising the groups stake in AZ.


Air France-KLM board in crossfire over Alitalia stake
http://www.reuters.com/article/2013/...ia-airfrance-idUSBRE98M0LF20130923


Maybe we hear an update later tonight...



From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 90, posted (6 months 4 weeks ago) and read 23580 times:

AFKL board has deferred a decision.

They say they are awaiting for vital information from AZ own management and information from forthcoming AZ board meeting.

Air France-KLM defers decision on Alitalia, seeks more data
http://finance.yahoo.com/news/air-fr...klm-defers-decision-193809084.html

=



From the desert to the sea, to all of Southern California
User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 91, posted (6 months 4 weeks ago) and read 23582 times:

^^^clever move by AF  



Quoting GCT64 (Reply 88):
If we are referring purely to EU short-haul, then matching the best of the legacies is, unfortunately, not good enough because none of them, despite all their efforts, are making money on short-haul. So even being "as good and efficient as LH" or "as good and efficient as BA" (despite being a great achievement) is not enough, one has to have the lucrative long-haul network connecting into your EU short-haul - and it is difficult to see AZ having a large enough, viable, lucrative long-haul network to make the short-haul business work.

You are right. AZ short-haul ops are oversized, and the meager profit on its long-haul business cannot offset the losses on short-haul. In fact AZ is in the opposite situation of AF : it has a low cost base and also a low revenue.





[Edited 2013-09-23 13:13:06]


I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinefactsonly From Montserrat, joined Aug 2012, 714 posts, RR: 0
Reply 92, posted (6 months 3 weeks 6 days 23 hours ago) and read 23516 times:

Quoting LAXintl (Reply 89):
However inside AFKL boardroom there seems to be disagreement with Dutch members and unions opposing raising the groups stake in AZ.

Please remember that KLM and Alitalia signed an extensive Passenger and Cargo Alliance agreement in 1998, in which KLM agreed to contribute Euro 100 million to the development of a joint MXP hub.

It did not take very long for KLM Management to loose patience with AZ, and the airline took the unprecedented decision to break the alliance at a cost of another Euro 200 million which KLM had to pay in 'break fees' to AZ.

Having lost Euro 300 million, Dutch unions and KLM Management understandably will be double careful this time. One does not easily make the same mistake twice.


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 93, posted (6 months 3 weeks 6 days 12 hours ago) and read 23253 times:

AF's idea is to use AZ as a mere feeder to CDG and AMS (something that AF is actually already doing, especially from Northern Italy) and certainly not to develop it. I see even a reduction of the already ludicrous AZ long-haul network after AF's takeover. On the other hand, I also see no alternatives to AF (EY could be an alternative, but AF has de facto vetoed it) other than outright bankruptcy, which is something the Italian government cannot allow to happen. So I think that AF will get what it wants (basically for free ...)

User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 94, posted (6 months 3 weeks 5 days 23 hours ago) and read 22981 times:

Quoting factsonly (Reply 92):
KLM and Alitalia signed an extensive Passenger and Cargo Alliance agreement in 1998, in which KLM agreed to contribute Euro 100 million to the development of a joint MXP hub.

It did not take very long for KLM Management to loose patience with AZ, and the airline took the unprecedented decision to break the alliance at a cost of another Euro 200 million which KLM had to pay in 'break fees' to AZ.

Having lost Euro 300 million, Dutch unions and KLM Management understandably will be double careful this time. One does not easily make the same mistake twice.

So what? The Dutch should be quite happy instead ! Now they can take their "revenge" on Alitalia. Buy them for dirt cheap, and show them how to manage an airline  .



Quoting RGFC (Reply 93):
AF's idea is to use AZ as a mere feeder to CDG and AMS (...).I see even a reduction of the already ludicrous AZ long-haul network after AF's takeover.

Where do you get that from ? In fact the Italian government may well put some conditions on the takeover in exchange of restructuring AZ debt. For instance, AF should commit to maintain an intercontinental hub at FCO. This should not be an issue for AF as Alitalia long-haul business has been described by its CEO as profitable. Most intercontinental destinations served by AZ are already well served by AFKL (GRU, GIG, EZE, NRT, KIX, JFK). An integration of Alitalia into the AFKL group would only strengthen the network by offering more connectivity and flexibility to their customers. I do not rule out new destinations in the mid term, mainly ST hubs like ICN or NBO for instance.




Quoting RGFC (Reply 93):
On the other hand, I also see no alternatives to AF (EY could be an alternative, but AF has de facto vetoed it) other than outright bankruptcy,

I am afraid you are right here. No other European carrier is interested, LH has often stated it was not interested in buying a new airline for the time being and IAG must reorganize IB and it is more interested in developing Vueling (quite rightfully). Outside Europe, any other airline would not be allowed to own more than 49% of AZ, and would likely have to cope with AFKL as a minority shareholder that would retain the right to increase its stake at any moment. As for EY, they are allied with AFKL and I suspect the two groups are playing hand in hand in this case.



Quoting RGFC (Reply 93):
So I think that AF will get what it wants (basically for free ...)

Again, sad but true. If AF plans work out, it will have to thank Mr Berlusconi for his intervention in 2008. It can have AZ now for just a fraction of the price (15/20%) it was ready to pay 5 years ago...



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 95, posted (6 months 3 weeks 5 days 12 hours ago) and read 22684 times:

Quoting Azure (Reply 94):
Where do you get that from ? In fact the Italian government may well put some conditions on the takeover in exchange of restructuring AZ debt.

I don't think the Italian government is in any position to impose restrictions (it seems on the contrary that AF is imposing conditions for AZ's acquisition: no debt and full decisional control on AZ's future). What AF/KL covet is Northern Italian passengers via CDG and AMS (leaving FCO as a mere secondary hub with a handful of flights, as it is now). AF's management has basically already declared that the new AZ plan is too ambitious (?!) and that AZ's network needs to be restructured (not increased), i.e. AF wants AZ as a mere feeder. Of course all of the above makes a lot of sense from AF's perspective, especially at a time when European airlines are facing increased competition. (Northern Italy has traditionally been a LH stronghold, and by acquiring AZ AF could try and challenge LH on this important market: don't forget that Northern Italy is still one of the most economically advanced areas in Europe)

Quoting Azure (Reply 94):
If AF plans work out, it will have to thank Mr Berlusconi for his intervention in 2008. It can have AZ now for just a fraction of the price (15/20%) it was ready to pay 5 years ago...

And Berlusconi still insists that he did the right thing 5 years ago ... (I wonder what would have happened if he had been wrong ...)


User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 96, posted (6 months 3 weeks 5 days 4 hours ago) and read 22411 times:

Quoting RGFC (Reply 95):
I don't think the Italian government is in any position to impose restrictions (it seems on the contrary that AF is imposing conditions for AZ's acquisition: no debt and full decisional control on AZ's future). What AF/KL covet is Northern Italian passengers via CDG and AMS (leaving FCO as a mere secondary hub with a handful of flights, as it is now). AF's management has basically already declared that the new AZ plan is too ambitious (?!) and that AZ's network needs to be restructured (not increased), i.e. AF wants AZ as a mere feeder. Of course all of the above makes a lot of sense from AF's perspective, especially at a time when European airlines are facing increased competition. (Northern Italy has traditionally been a LH stronghold, and by acquiring AZ AF could try and challenge LH on this important market: don't forget that Northern Italy is still one of the most economically advanced areas in Europe)

I agree that the premium market from Northern Italy is quite desirable, but AFKL market share on this segment is already 7% while LH group's is 10% and IAG's 5% (sorry, I read that not so long ago but cannot find the sources again), the balance being split between AZ and the other foreign operators (SQ, EK, etc.). I do no think AFKL are really concerned with these figures and frankly they do not need AZ for the purpose of just feeding their 2 hubs (albeit some valuable slots at LIN).

AF has indeed stated that AZ industrial plan was too "ambitious" because it relied on too many new routes too quickly, which implies the acquisition of several aircraft when AZ has no money. A network reorganization may imply a decrease in frequency but I do not see AFKL axing many intercontinental routes, if any. Again these are the only profitable ones. However I believe some P2P ops within Europe will be axed and the frequency of some domestic routes will be decreased.

Italy isAFKL 3rd market size-wise. Buying AZ to axe their intercontinental routes just does not make any sense : this would leave the doors wide open to the competition, a risk they will not take.

These are mere speculations from our part as it is not sure this takeover will ever happen...



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 97, posted (6 months 3 weeks 5 days 3 hours ago) and read 22340 times:

Quoting Azure (Reply 96):
Buying AZ to axe their intercontinental routes just does not make any sense

On the basis of what reported today in the Corriere della Sera website, as a cost-cutting measure AF is thinking about substantially slashing AZ's fleet: it seems to me that AF is interested only on some of AZ's assets (you mentioned the slots at LIN) and not in revamping the airline. After all, AF/KL are laying off about 2,800 employees and also 'politically' they cannot invest in AZ now (according to Italian trade unions, AF/KL would actually start by laying off about 2,000 AZ employees ....). All figures are taken from the Corriere della Sera website.
IMO nobody is (understandably) interested in really acquiring AZ (i.e. investing in AZ)


User currently offlineLO231 From Belgium, joined Sep 2004, 2392 posts, RR: 23
Reply 98, posted (6 months 3 weeks 4 days 21 hours ago) and read 22093 times:

Wow.

Flew BRU-FCO-VCE-FCO-BRU last June and was surprised how Swift everything went during flights, transfer etc.. Smiling cabin crew, great service, not at all much of a detour if compared to direct flights which were double the price....

I think they've made great changes to the airline just noticed that their Airbus and Embraer fleet was EI- registered... They dont own their planes I assume?



Got both LO 788 frames already, next LO E95 and 734 BRU-WAW-BRU
User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 99, posted (6 months 3 weeks 4 days 12 hours ago) and read 21933 times:

Quoting LO231 (Reply 98):
I think they've made great changes to the airline just noticed that their Airbus and Embraer fleet was EI- registered... They dont own their planes I assume?


Quite a lot of AZ planes are leased from an Irish company (some derive from the old "AP" fleet).
It's rare to read positive reviews of AZ

[Edited 2013-09-26 00:46:40]

User currently offlineLO231 From Belgium, joined Sep 2004, 2392 posts, RR: 23
Reply 100, posted (6 months 3 weeks 4 days 7 hours ago) and read 21643 times:

Yeah, I think some of the old school cabin crew were retired because except of a few niche carriers in Europe I was never offered three beers on a 2 hrs flight!

And with a smile!!! I hope they keep up that side, towards the customer, the rest I have no idea about, so will not comment..



Got both LO 788 frames already, next LO E95 and 734 BRU-WAW-BRU
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 101, posted (6 months 3 weeks 4 days 5 hours ago) and read 21554 times:

Sorry but I don't have link, however I see reported in French business paper that part of AF plans for AZ would be to revise its network slightly including fleet.

It says AFKL would seek to reduce the short/medium haul fleet by 20-22 frames, and cancel plans to receive 6 additional longhaul aircraft.
As far as hubs, they say they seek to keep Rome and capitalize on fact that its one of the most visited cities on the world and will seek to build market share further.


User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 102, posted (6 months 3 weeks 3 days 23 hours ago) and read 21631 times:

Alitalia board meeting today.

Company is asking shareholders to approve a capital increase of at least €100 million to keep the operation afloat while broader options are considered.

They scheduled an extraordinary shareholder meeting on October 14th to deliberate.

Story:
http://www.miamiherald.com/2013/09/2...italia-seeks-capital-increase.html

=



From the desert to the sea, to all of Southern California
User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 103, posted (6 months 3 weeks 3 days 23 hours ago) and read 21597 times:

Quoting LAXintl (Reply 102):
Alitalia board meeting today.

Company is asking shareholders to approve a capital increase of at least €100 million to keep the operation afloat while broader options are considered.

They scheduled an extraordinary shareholder meeting on October 14th to deliberate.

AFKL voted against the capital increase, due to insufficient information on the debt.
The Italian government is now divided on the position to adopt vis a vis AFKL.
More news in this WSJ Article : http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-338910/



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineslcdeltarumd11 From United States of America, joined Jan 2004, 3097 posts, RR: 0
Reply 104, posted (6 months 3 weeks 3 days 23 hours ago) and read 21532 times:

I wonder what assets could be leased or sold for cash? I am not sure what can/cant be sold that they have of value.

JFK prime Europe departure slots? LHR slots? I dont know if they have acceptable time slots but i could see Delta being interested in more LHR slots lease or sale if the time was accepable.


User currently offlineAesma From France, joined Nov 2009, 6110 posts, RR: 9
Reply 105, posted (6 months 3 weeks 3 days 22 hours ago) and read 21463 times:

On this forum you get the impression that Rome is Detroit or something. But actually it's more like Washington DC. It has poor and rich, with politicians mixed in. And of course artists, tourists, etc. As far as I know, despite being close to NYC, Washington still has lots of flights.


New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 106, posted (6 months 3 weeks 3 days 22 hours ago) and read 21448 times:

Well AFKL is minority owners. If other parties like 4 big banks that have portion of AZ are willing to recapitalize the €100m then AFKL will see their shareholding diluted without participation.
Also maybe this opens door to Etihad again which had previously been rumored to provide this €100m initial investment.


User currently offlineseemyseems From United Kingdom, joined Jan 2009, 967 posts, RR: 7
Reply 107, posted (6 months 3 weeks 3 days 20 hours ago) and read 21399 times:

Quoting RGFC (Reply 99):
It's rare to read positive reviews of AZ

This is slightly off topic but I had a great flight with AZ (AMS-LIN) back in June, EI-DSE

Whatever happens, it will be sad to see the AZ name disappear, hopefully it will remain



seemyseems
User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 108, posted (6 months 3 weeks 3 days 12 hours ago) and read 21262 times:

Quoting mercure1 (Reply 106):
Well AFKL is minority owners. If other parties like 4 big banks that have portion of AZ are willing to recapitalize the €100m then AFKL will see their shareholding diluted without participation.
Also maybe this opens door to Etihad again which had previously been rumored to provide this €100m initial investment.

This capital increase, if accepted at the AGM on October 14th, would be a (very) short term solution. AZ could survive until the end of this year, not longer. The industrial plan aiming at a breakeven in 2016 requires over € 450 Mi in investment.
Let's face it : AZ as a stand alone carrier has 0 chance to survive in an ever more competitive market. If the Italian government and the shareholders do not find a solution with AF, AZ will have to be nationalized (or go bankrupt). Needless to say this would be the worst solution for the italian taxpayers.
AF is trying to impose certain conditions for its takeover that any other carrier , be it EY or SU, would seek to impose as well. I would not bet one cent on a last minute white knight !



Quoting Aesma (Reply 105):
On this forum you get the impression that Rome is Detroit or something. But actually it's more like Washington DC. It has poor and rich, with politicians mixed in. And of course artists, tourists, etc. As far as I know, despite being close to NYC, Washington still has lots of flights.

You are right. Rome is one of the world's most visited cities. FCO is larger by a wide margin than LIN and MXP combined.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 109, posted (6 months 3 weeks 3 days 11 hours ago) and read 21186 times:

It's fine for me if AF 'purchases' (for a pittance) AZ, and it is also fine if they will use AZ as a mere AF/KL feeder (which is basically what they are already doing at present, by the way, especially from Northern Italy). What would be instead unacceptable is that in exchange for this 'favour' the Italian government granted AF any kind of veto power on the development of MXP and FCO. (AF have always seen MXP as a dangerous competitor of CDG and AMS and therefore 'forced' AZ not to operate any flights from MXP save for a token presence, but in my opinion they also do not want a real development of FCO: it seems that also Italian folks have finally understood this, including FCO's owners, who have recently expressed their misgivings about an AF-owned AZ for the development of FCO.)
So, as far as I'm concerned, AF is welcome to take over AZ and use it as a mere subsidiary, provided however that MXP and FCO be left free to look elsewhere (Gulf and Asian airlines first and foremost, but also US airlines) for the development of their long-haul network (which of course would be good also for the Italian economy)


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 110, posted (6 months 3 weeks 3 days 10 hours ago) and read 21131 times:

Why would AF oppose MXP? In many ways it would be beneficial for skyteam and give it more coverage throughout Europe. I mean you dont see BA trying to shut down MAD or TXL or LH trying to shut down ZRH and VIE.

User currently offlineusdcaguy From United States of America, joined Jan 2004, 871 posts, RR: 2
Reply 111, posted (6 months 3 weeks 3 days 10 hours ago) and read 21128 times:

Quoting RGFC (Reply 109):
provided however that MXP and FCO be left free to look elsewhere (Gulf and Asian airlines first and foremost, but also US airlines)


One of the chronic problems of AZ (as of other carriers such as AF and IB) is the belief that they can have an effective short-haul hub network with the costs of a legacy carrier. Connecting people from CDG to OTP over MXP might have made the carrier look stronger in the past, but this strategy left a glut of seats flying around on many days with no passengers to pay for the staff. I would argue that the best opportunities from MXP are long-haul, witnessed by the now very competitive JFK-MXP between AA, EK and AZ/DL. There is also good opportunity to China, but the issue we have these days is that there is no longer a multitude of AZ flights coming into MXP, and it has already been decided that FCO will remain AZ's hub, which does not really help business in the north of Italy. AF probably does not have much of an option in terms of maximizing AZ's network. The best approach, unfortunately, might be to cut capacity until the airline is profitable, at which point we're talking about an unpalatable social situation. It's little wonder AF does not have seem to have any miracle cures. If it is dealing with capacity cuts and layoffs itself, it more than likely does not want to take on another beast.


User currently offlinefactsonly From Montserrat, joined Aug 2012, 714 posts, RR: 0
Reply 112, posted (6 months 3 weeks 3 days 9 hours ago) and read 21051 times:

Quoting RGFC (Reply 109):
AF have always seen MXP as a dangerous competitor of CDG and AMS and therefore 'forced' AZ not to operate any flights from MXP save for a token presence, but in my opinion they also do not want a real development of FCO

This sounds very unreal!

As a co-owner of AZ, the AF/KL Group will benefit financially if AZ can operate any Italian hub profitably, whether today or in the future.

To show the opposite is more likely, in the 1990s KL invested Euro 100 million in MXP to support the AZ/KL alliance, in the knowledge that a Southern hub adds strength to the combined group.

The AZ problem is much more linked to:
- 3x airports in economic stronghold Milan, taking O&D traffic away from a single strong hub airport in North Italy.
- The strong Italian economy is located in the North, while the strongest airport FCO is too far south to act as a hub.
- The 'German' problem, many mid-size cities in a large country - meaning no single big metropolitan area (LHR, CDG)
- Too little 'connecting wave' scheduling by AZ at any of its airports to support network connectivity.

Please don't believe in fairy tales.


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 113, posted (6 months 3 weeks 3 days 7 hours ago) and read 20979 times:

Quoting factsonly (Reply 112):
To show the opposite is more likely, in the 1990s KL invested Euro 100 million in MXP to support the AZ/KL alliance, in the knowledge that a Southern hub adds strength to the combined group.

Please don't confuse the "old" KL, which wanted to develop MXP, invested in MXP and had to abandon the project due to the short-sightedness of Italian politicians (and the opposition to LIN's closure of AF (at that time not linked to KL), LH and BA as well as most Milanese), with the "new" KL, which is not KL but AF/KL: AF never wanted MXP because it's a menace for CDG and AMS. FCO is acceptable only since Northern Italians have historically never liked this airport and most of them have always preferred to fly via other European hubs, obviously including CDG and AMS: therefore, AZ at FCO does not subtract (much) potential traffic to AF/KL at AMS and CDG the way a strong MXP with a hub-based carrier would.

On the other hand, I share your objective analysis about AZ's predicament but this has nothing to do with AF (not the "old" KL) being historically against MXP.


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 114, posted (6 months 3 weeks 3 days 2 hours ago) and read 20783 times:

Why would AF be against a third skyteam hub in Europe in MXP? AF and AZ are both in the same allince so MXP and CDG can coexist and compliment eachother rather nicely. AF's behavior is unethical and nonsensical since AZ is not a competetor but an ally. MXP is also much better located geographic wise than CDG to be a hub. CDG like LHR is located at the the very fringe of the European continent and is too far west. BA has no intention to close down MAD and LH has no intention of closing down ZRH.

User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 115, posted (6 months 3 weeks 3 days 1 hour ago) and read 20724 times:

Recent history has proved that AF are contrary to MXP (they have also moved from MXP to LIN all of their flights to CDG and AMS). I don't think AF are 'unethical': AF simply follow their own interests (as all airlines in the world do) which at present do not include MXP. Whether this is a wise strategy or not it's not up to me to say. (Probably they have enough with 2 hubs at AMS and CDG and they cannot have a third relatively close hub at MXP. FCO is farther away and a somewhat limited hub.) Alliances don't really count so much nowadays ...

User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1131 posts, RR: 2
Reply 116, posted (6 months 2 weeks 5 days 18 hours ago) and read 20226 times:

I dont think AF is too enthused to go after AZ at the moment.

AF on Oct.4 will reveal additional hardship cuts. Already one union called for strike, with pilots possibly following.

It will be hard case to explain why AF is crying it has no money and must make deeper cuts, if it goes out and spends many hundred million Euro's into AZ.


While I think AF does not want to lose opportunity or relationship with AZ, I am not sure its doing anything at the moment except maybe buying time.


User currently offlinePolot From United States of America, joined Jul 2011, 2048 posts, RR: 1
Reply 117, posted (6 months 2 weeks 5 days 18 hours ago) and read 20193 times:

Quoting miaintl (Reply 114):
AF's behavior is unethical and nonsensical since AZ is not a competetor but an ally.

Of course AZ is a competitor- being in the same alliance does not change that and they only own 25% of AZ. In the end airlines prefer passengers sitting in their metal or that of a wholly owned subsidiary/operation.


User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 118, posted (6 months 2 weeks 5 days 4 hours ago) and read 19954 times:

Quoting mercure1 (Reply 116):
I dont think AF is too enthused to go after AZ at the moment.

It is certainly not a good idea to look enthusiastic in front of your seller, right ? However I do believe that AF is still willing to takeover AZ, but under the strict conditions that we discussed last week. AF will not buy AZ at all cost, this is for sure.

Interestingly, one of the top shareholder of Alitalia, the Benetton group, has already indicated it would vote in favor of Air France. Another major shareholder is mired in a financial scandal and all its assets are being seized. It seems pretty unlikely that it could participate to the capital increase...

The latest report by Reuters : http://www.reuters.com/article/2013/...ia-airfrance-idUSBRE99016V20131001



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineLAXintl From United States of America, joined May 2000, 24325 posts, RR: 47
Reply 119, posted (6 months 2 weeks 1 day ago) and read 19584 times:

Italian prime minister says state-owned railway group Ferrovie dello Stato should invest in AZ and will be holding a meeting on Monday to discuss financial support for the airline..


Italy to ask state railways to invest in Alitalia
http://finance.yahoo.com/news/italy-...ate-railways-invest-110017908.html

=



From the desert to the sea, to all of Southern California
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 120, posted (6 months 2 weeks 12 hours ago) and read 19212 times:

If AF takes over AZ would that mean the end of AZs long-haul operations?

User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 121, posted (6 months 2 weeks 1 hour ago) and read 18909 times:

Quoting miaintl (Reply 120):
If AF takes over AZ would that mean the end of AZs long-haul operations?

No it would not. AZ expansion plan would be put on hold for a while though. AF would like AZ to prove it can break even before expanding, and this implies some trimming but mainly on Domestic and Regional ops, not so much on Long-Haul.

However the Italian government is doing its utmost to prevent AF from buying out AZ as mentioned in post #119.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineFlighty From United States of America, joined Apr 2007, 8204 posts, RR: 3
Reply 122, posted (6 months 2 weeks 1 hour ago) and read 18898 times:

It is time for the liberalized EU to let go of these old-fashioned regional carriers.

Quoting miaintl (Reply 120):

It should not mean that. Instead AF should be a 3-hub airline with hubs at AMS, CDG and MXP. Multi hub airlines are meaningfully more efficient than single-hub. The EU market legally supports multi hub. Therefore it is an inevitability, barring the typical sorts of political old-boy favors.

[Edited 2013-10-07 11:27:47]

User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 123, posted (6 months 1 week 6 days 23 hours ago) and read 18744 times:

The saga goes on... Per Reuters : "The Italian Transport Minister denied on Monday the government had asked Italian state railway Ferrovie dello Stato to invest in Alitalia, after reports Rome was exploring an alliance between the two to keep Alitalia out of foreign hands".
http://www.reuters.com/article/2013/.../07/alitalia-idUSL6N0HX1GO20131007
Apparently a merger between AZ and the Italian Railways could meet opposition from the EU competitive Authority



Quoting Flighty (Reply 122):
It is time for the liberalized EU to let go of these old-fashioned regional carriers.

The EU is not involved (yet).



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 124, posted (6 months 1 week 6 days 21 hours ago) and read 18532 times:

Will MXP be reestablishd as a hub if AF takes over AZ?

User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 125, posted (6 months 1 week 6 days 12 hours ago) and read 18347 times:

Quoting miaintl (Reply 124):
Will MXP be reestablishd as a hub if AF takes over AZ?

Definitely not. AF just wants to develop CDG (even AMS is a secondary airport compared to CDG). AF can tolerate FCO only since it is much farther South and thus nobody from Central or Northern Europe would think of using it as a hub, save maybe for flights in the Mediterranean region (that's why FCO never actually worked as a hub). AF/KL (like BA and LH) prefer to use LIN to ferry passengers to their hubs, which is by the way understandable especially in these times of crisis. AF/KL do not even fly to MXP save for regional flights (they are obliged to fly to MXP in these cases).

AF's plan for AZ is actually to slash its fleet and long-haul service. (Of course, things may change in the future if there were an economic recovery, but at present that's the situation.)

MXP could become a kind of hub only in the unlikely event that AZ were eventually bought by EY (EY cannot buy a majority stake in AZ, but it could become its main shareholder): EY flies daily to MXP and refused to shift its flight to FCO as requested by AZ (EY has a codeshare on an AZ flight from FCO to AUH, but it does not use its metal on FCO). But even in this case I would be surprised to see many AZ flights from MXP.


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 126, posted (6 months 1 week 6 days 11 hours ago) and read 18274 times:

So AZ will cease all long-haul flights if it goes under AF ownership? Is not AFs behavior completely illegal and unethical by trying to create a monopoly for itself and trying to elminate all competition? Also why did AZ move its hub to FCO back in 2008, whose idea was that and why was it done?

User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 127, posted (6 months 1 week 6 days 10 hours ago) and read 18407 times:

Quoting miaintl (Reply 126):
So AZ will cease all long-haul flights if it goes under AF ownership?

There is no such plans for AZ. AF and some AZ board members denied that AF was ready to implement a drastic plan in case of a takeover.
Source : Reuters http://uk.reuters.com/article/2013/1...litalia-plan-idUKBRE9930KN20131004



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineSCL767 From Chile, joined Feb 2006, 8604 posts, RR: 5
Reply 128, posted (6 months 1 week 6 days 10 hours ago) and read 18367 times:
Support Airliners.net - become a First Class Member!

Quoting miaintl (Reply 126):

Hmm...I wonder if LATAM is looking at launching GRU-FCO to complement the daily GRU-MXP service...


User currently offlinekjellverschuren From Netherlands, joined Jul 2012, 9 posts, RR: 0
Reply 129, posted (6 months 1 week 6 days 10 hours ago) and read 18313 times:

Quoting miaintl (Reply 126):

So AZ will cease all long-haul flights if it goes under AF ownership? Is not AFs behavior completely illegal and unethical by trying to create a monopoly for itself and trying to elminate all competition?

Saying this is quite strange considering that LH owns Swiss and Austrian. Large airline companies are simply more viable in these times. Another example would be BA/IB.

On a more personal note, it will never be just AF who will buy the 50% stake in AZ, The mothercompany AF/KL will be the one buying it. I personally do not see this happening though, the risk is too high considering the opposition AF/KL will receive from the Italian government and rules there and considering the reorganization at AF.


User currently offlinerunway23 From US Minor Outlying Islands, joined Jan 2005, 2153 posts, RR: 36
Reply 130, posted (6 months 1 week 6 days 10 hours ago) and read 18283 times:

Quoting Viscount724 (Reply 6):
Agree. Switzerland is doing just fine without Swissair, and Belgium without Sabena, and you can still reach Hungary quite easily without Malev.
Quoting miaintl (Reply 126):
So AZ will cease all long-haul flights if it goes under AF ownership? Is not AFs behavior completely illegal and unethical by trying to create a monopoly for itself and trying to elminate all competition? Also why did AZ move its hub to FCO back in 2008, whose idea was that and why was it done?

It would be very foolish for AF to do such a thing as long-haul is the only aspect of AZ actually generating profits.

What AZ needs to do is re-think their timings and waves to connect more efficiently to and from their long-haul flights. Right now their schedule is a mess and fails to deliver a real marketable schedule and pushes down its yields.


User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 131, posted (6 months 1 week 6 days 10 hours ago) and read 18299 times:

Quoting miaintl (Reply 124):
AF just wants to develop CDG (even AMS is a secondary airport compared to CDG)

??? AMS is definitely a world-class hub. It is an essential part of the AFKL strategy. Actually KL - and consequently AMS - has greatly benefitted from its merger with AF. Look at what it is now and what it was pre-merger, 10 years ago : a small airline, with heavy debts, an ageing fleet and a limited intercontinental network. KL has expanded a lot thanks to the merger. I see no reason why AZ should worry about a takeover. It will not only keep its identity, just like KL has, but it will become stronger. There is no future for stand-alone carriers in Europe. Reaching a critical size in an ever more competitive market is vital and AZ has no possibility to achieve this on its own.



Quoting kjellverschuren (Reply 129):
Saying this is quite strange considering that LH owns Swiss and Austrian. Large airline companies are simply more viable in these times. Another example would be BA/IB.

Completely agree with this.



Quoting kjellverschuren (Reply 129):
On a more personal note, it will never be just AF who will buy the 50% stake in AZ, The mothercompany AF/KL will be the one buying it. I personally do not see this happening though, the risk is too high considering the opposition AF/KL will receive from the Italian government and rules there and considering the reorganization at AF.

You are correct, it would be a takeover by the AFKL group.
I am afraid that the Italian government struggles to find an alternative though.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineandy33 From United Kingdom, joined Sep 2009, 108 posts, RR: 0
Reply 132, posted (6 months 1 week 6 days 10 hours ago) and read 18265 times:

Which Alitalia international routes are (a) profitable or capable of being made so, and (b) governed by bilaterals between Italy and the destination country, rather than treaties between the EU/EEA and the destination country?
If there are any, then speculation about total disappearance of Alitalia is pointless as even under AF/KLM ownership there would have to be an "Italian" airline to exercise rights under bilaterals.


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 133, posted (6 months 1 week 6 days 9 hours ago) and read 18193 times:

But if AF is so opposed to AZ creating a hub at MXP, then it is clear that AF has no intention of making AZ a strong global carrier like it did with KL back in 2004. Its a shame that AF is unable to see how a strong MXP hub can be very beneficial for the Skyteam alliance and help AF-KL effectively compete with LH, LX and OS.

[Edited 2013-10-08 03:57:03]

User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 134, posted (6 months 1 week 6 days 8 hours ago) and read 18133 times:

Quoting miaintl (Reply 133):
But if AF is so opposed to AZ creating a hub at MXP, then it is clear that AF has no intention of making AZ a strong global carrier like it did with KL back in 2004. Its a shame that AF is unable to see how a strong MXP hub can be very beneficial for the Skyteam alliance and help AF-KL effectively compete with LH, LX and OS.

Agree ! AF may keep a secondary hub at FCO for the Mediterranean region and a few other flights, but that's all.
Also consider that in 2008 the so-called "Phoenix plan" (AF's plan for AZ) was to basically limit AZ to medium and short haul flights from FCO and LIN, whilst using AF for long haul flights: that's why Italian unions were 100% against AF's takeover of AZ (and unusually allied with Berlusconi !). AF's plans certainly haven't changed in the meantime (AF now also has KL and AMS and surely it doesn't need another hub).

However, I think that the only solution for AZ to avoid bankruptcy is to be sold to AF/KL (save if EY decided to buy it, but it's unlikely).

The important thing is that MXP and FCO must be left 100% free to find other airlines to develop their business and to serve passengers from their respective regions (AZ unsuccessfully tried to block EK's new MXP-JFK flight: this will be AF's strategy also in the future and it will be important for Italian politicians to always grant rights to any airlines that want to fly from MXP or FCO, regardless of any opposition from AZ/AF).


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 135, posted (6 months 1 week 6 days 8 hours ago) and read 18134 times:

If AF does not end up buying AZ, how will AZ be able to survive? Also would AZ move its hub back to MXP if it remained solely in Italian Hands? Moving to MXP is the only way AZ can be effectively competative and break even, at FCO it cant do that.

User currently offlineJimJupiter From Germany, joined Sep 2011, 191 posts, RR: 0
Reply 136, posted (6 months 1 week 6 days 8 hours ago) and read 18101 times:

Quoting miaintl (Reply 135):
Moving to MXP is the only way AZ can be effectively competative and break even, at FCO it cant do that.

The problem for MXP is LIN, and that situation is not going to change anytime soon. This has been discussed to death on this site, as a quick search will probably show.   



One is born, one runs up bills, one dies.
User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 137, posted (6 months 1 week 6 days 6 hours ago) and read 17951 times:

Quoting JimJupiter (Reply 136):
The problem for MXP is LIN, and that situation is not going to change anytime soon. This has been discussed to death on this site, as a quick search will probably show

Right ! It is now impossible to close LIN (they are even building a metro line to LIN !) but at least they should enforce the existing rules (that theoretically limit the number of daily flights at LIN) which are now easily circumvented by fake codeshare flights (with the result that AF/KL and BA and, to a lesser extent, LH operate as many flights a day from LIN to their hubs as they want).


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 138, posted (6 months 1 week 6 days 5 hours ago) and read 17926 times:

There is a news report that AZ might stop flying in 5 days. It seems that AZ might end becoming a regional carrier and closing its FCO hub for good.

[Edited 2013-10-08 07:27:25]

User currently offlineOA412 From United States of America, joined Dec 2000, 5225 posts, RR: 25
Reply 139, posted (6 months 1 week 6 days 4 hours ago) and read 17742 times:

Quoting mercure1 (Reply 17):
We have been through this discussion a million times, but hubing at Malpensa is not feasible as Milan is split into two airports.

  

Quoting miaintl (Reply 135):
Moving to MXP is the only way AZ can be effectively competative and break even, at FCO it cant do that.

You post this in every thread about AZ, yet never provide a single shred of evidence to corroborate your assertion that AZ can only be profitable and effective if it hubs at MXP. Fact, AZ lost money when it was hubbed at MXP just like it continues to lose money while hubbed at FCO. Fact, Milan has two airports serving the city, MXP and LIN. As long as LIN remains open, MXP does not have a shot at being an effective hub and competing with nearby ZRH or MUC.

With all due respect, you can post the same thing over and over again, but it's not going to come true just because you post it. Until you can back up your assertions with numbers, it is just your opinion that hubbing at MXP would make AZ more competitive and not fact.



Hughes Airwest - Top Banana In The West
User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 140, posted (6 months 1 week 6 days 3 hours ago) and read 17714 times:

Quoting OA412 (Reply 139):

Then please explain to me what your solution for AZ is? What evidence do you have that AZ is instead making money at FCO? You ask me for numbers, but I want to see your numbers. If AZ is losing money by hubbing at MXP and FCO, then it is clear to me that AZ cant have an effective hub anywhere and should just give up on trying to find one. With the two airports excuse, keep in mind that Milan is not the only city in the world that has two or more airports. London, Paris, Tokyo, New York, Bejing and Shanghai all have more than one airport and things are going fine for them. If it can work for those cities than having multiple airports can work for Milan.

[Edited 2013-10-08 09:15:22]

[Edited 2013-10-08 09:16:49]

User currently onlineViscount724 From Switzerland, joined Oct 2006, 24075 posts, RR: 22
Reply 141, posted (6 months 1 week 6 days 3 hours ago) and read 17602 times:

Quoting miaintl (Reply 140):
Quoting OA412 (Reply 139):

Then please explain to me what your solution for AZ is?

The solution is to let AZ disappear and see if anyone wants to start over. Switzerland is doing fine without Swissair and Belgium without Sabena. Italy will survive just fine without AZ.


User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7209 posts, RR: 3
Reply 142, posted (6 months 1 week 6 days 2 hours ago) and read 17531 times:

Actually Switzerland has LX and Belgium has SN.

But doe anyone want AZ?.


User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 143, posted (6 months 1 week 6 days 1 hour ago) and read 17387 times:

Quoting miaintl (Reply 44):
Quoting miaintl (Reply 47):
Quoting miaintl (Reply 49):
Quoting miaintl (Reply 61):
Quoting miaintl (Reply 70):
Quoting miaintl (Reply 140):
the two airports excuse, keep in mind that Milan is not the only city in the world that has two or more airports. London, Paris, Tokyo, New York, Bejing and Shanghai all have more than one airport and things are going fine for them.

You are virtually holding up this thread with your idea that MXP is the solution for AZ. Other posters have given you multiple evidences it was not a good idea. Now you are comparing Milan with cities that are twice larger, at least!
The troubles of AZ are not due to the location of its hub. They are due to poor management, too strong a focus on regional ops, and inefficient use of its hub.



Quoting runway23 (Reply 130):
What AZ needs to do is re-think their timings and waves to connect more efficiently to and from their long-haul flights. Right now their schedule is a mess and fails to deliver a real marketable schedule and pushes down its yields.

  



Quoting andy33 (Reply 132):
Which Alitalia international routes are (a) profitable or capable of being made so, and (b) governed by bilaterals between Italy and the destination country, rather than treaties between the EU/EEA and the destination country?
If there are any, then speculation about total disappearance of Alitalia is pointless as even under AF/KLM ownership there would have to be an "Italian" airline to exercise rights under bilaterals.

Alitalia does not provide for a breakdown of its routes profitability. No airline does in fact. The reason is quite understandable. But its management has recently stated the long-haul ops were the most profitable.
IIRC, the EU has an open sky agreement only with the US. All other destinations are ruled by bilaterals.
If AZ merges with AFKL, it will retain its italian identity, just like KL and AF have retained their own as subsidiairies of another company, the AFKL holding company that happens to be headquartered in Paris, France.
If AZ goes bankrupt and disappears, you are right, any airline that would like to exercise the Italian bilaterals will have to be registered in Italy. However we have seen the difficulties to start a new airline from scratch in Italy. Lufthansa Italia is a perfect example, it did not last long although Lufthansa was certainly a well-known and reputable brand in Italy.



Quoting Viscount724 (Reply 141):
Italy will survive just fine without AZ.

The Italian government takes a totally different approach and considers Alitalia as a strategic asset... They have a buyer, but yet this is not good enough...



Quoting bennett123 (Reply 142):
But doe anyone want AZ?

AFKL is ready.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineflyyul From Italy, joined Jun 2000, 4952 posts, RR: 51
Reply 144, posted (6 months 1 week 6 days 1 hour ago) and read 17337 times:

AZ needs to retool its business strategy. Let go of the domestic market - and focus on building an efficient hub at FCO.

AZ needs to dense up its A330-200s (or shed in favor of A330-300s). The name of the game in this business is cost, and with high fixed cost burden at AZ - AZ needs a natural hedge by having the most dense possible WB seating configurations. Even Del Torchio (AZ CEO) went out and assured that longhaul is profitable. This AF nonsense telling AZ not to overfly CDG to markets like YUL, YYZ, SFO is ridiculous.

If AZ can't expand the longhaul business and reduce its presence in shorthaul - there's no future for this company.

And MIAINTL - please let go of the MXP rhetoric. Focusing on MXP won't solve the fortunes of AZ - it will make it worse until the brain trust's in Lombardia limit traffic at LIN.


User currently offlineandy33 From United Kingdom, joined Sep 2009, 108 posts, RR: 0
Reply 145, posted (6 months 1 week 6 days ago) and read 17206 times:

Quoting Azure (Reply 143):
Alitalia does not provide for a breakdown of its routes profitability. No airline does in fact. The reason is quite understandable. But its management has recently stated the long-haul ops were the most profitable.
IIRC, the EU has an open sky agreement only with the US. All other destinations are ruled by bilaterals.
If AZ merges with AFKL, it will retain its italian identity, just like KL and AF have retained their own as subsidiairies of another company, the AFKL holding company that happens to be headquartered in Paris, France.
If AZ goes bankrupt and disappears, you are right, any airline that would like to exercise the Italian bilaterals will have to be registered in Italy. However we have seen the difficulties to start a new airline from scratch in Italy. Lufthansa Italia is a perfect example, it did not last long although Lufthansa was certainly a well-known and reputable brand in Italy.

Thanks, that's helpful. As far as I can see Alitalia flies to the following countries where the EU has negotiated either common external aviation agreements which have replaced bilateral treaties with multi-lateral ones, or full open-skies: Albania, Georgia, Israel, Jordan, Montenegro, Morocco, Serbia, USA. Presumably all these except the USA are considered short haul. There are countries with similar agreements that Alitalia chooses not to fly to, but could, such as Canada, and Brasil should be the next Alitalia long-haul destination to transfer from bilateral to multi-lateral.
There's still quite a range of long-haul routes that only an Italian-registered airline could serve from Italy, but obviously there's also a range of service levels between at one extreme,daily year round, and at the other, one flight per week summer only. What might help the discussion is if anyone can indicate which routes are seasonal and which year round.


User currently onlineViscount724 From Switzerland, joined Oct 2006, 24075 posts, RR: 22
Reply 146, posted (6 months 1 week 6 days ago) and read 17199 times:

Quoting andy33 (Reply 145):
Quoting andy33 (Reply 145):
There are countries with similar agreements that Alitalia chooses not to fly to, but could, such as Canada,

AZ operates daily A332 YYZ-FCO.


User currently offlineandy33 From United Kingdom, joined Sep 2009, 108 posts, RR: 0
Reply 147, posted (6 months 1 week 6 days ago) and read 17180 times:

Quoting Viscount724 (Reply 146):

Thanks for the correction. So that's another FCO route which doesn't require an Italian registered airline to operate it.


User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 148, posted (6 months 1 week 5 days 21 hours ago) and read 16946 times:

Does anyone know what the Italian government's plan is to save AZ? The airline risks going bankrupt in less than 5 days.

User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 149, posted (6 months 1 week 5 days 21 hours ago) and read 16936 times:

Quoting andy33 (Reply 145):
Thanks, that's helpful. As far as I can see Alitalia flies to the following countries where the EU has negotiated either common external aviation agreements which have replaced bilateral treaties with multi-lateral ones, or full open-skies: Albania, Georgia, Israel, Jordan, Montenegro, Morocco, Serbia, USA. Presumably all these except the USA are considered short haul. There are countries with similar agreements that Alitalia chooses not to fly to, but could, such as Canada, and Brasil should be the next Alitalia long-haul destination to transfer from bilateral to multi-lateral.
There's still quite a range of long-haul routes that only an Italian-registered airline could serve from Italy, but obviously there's also a range of service levels between at one extreme,daily year round, and at the other, one flight per week summer only. What might help the discussion is if anyone can indicate which routes are seasonal and which year round.

Thank you for this detailed analysis that provides a valuable perspective on a post-Alitalia era, since it is a possibility to consider. According to some sources, AZ may run out of cash in four or five days. It has already failed to pay its gas bills.
http://www.ft.com/intl/cms/s/0/b24ff...ec-00144feab7de.html#axzz2hAbcxi3A

In theory any European-registered airline could start ops from Italy to several destinations, but which ones and at what costs ? One issue I can see here is aircraft availability. Another one is the public perception on a foreign airline that would take advantage of the demise of the former flagshipl. Finally what would be the business case as the number of possible intercontinental destinations would be limited and the competition on short-haul with the LCCs would be intense.

You can find detailed information on the Alitalia network here : http://corporate.alitalia.it/en/company/network/network.html



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineAesma From France, joined Nov 2009, 6110 posts, RR: 9
Reply 150, posted (6 months 1 week 5 days 20 hours ago) and read 16828 times:



Quoting Flighty (Reply 122):
It is time for the liberalized EU to let go of these old-fashioned regional carriers.

Well the liberalized EU is none too popular with the people, I expect nationalist parties to make great strides in next year's European elections, so Italy losing its flag carrier now would not help one bit.

Quoting Azure (Reply 123):
Apparently a merger between AZ and the Italian Railways could meet opposition from the EU competitive Authority

That's what I thought right away but didn't have time to check who owns Ferrovie dello Stato Italiane, it's a state holding so that would amount to partial nationalization, a big no no for the EU.

Quoting miaintl (Reply 126):
So AZ will cease all long-haul flights if it goes under AF ownership? Is not AFs behavior completely illegal and unethical by trying to create a monopoly for itself and trying to elminate all competition? Also why did AZ move its hub to FCO back in 2008, whose idea was that and why was it done?

That doesn't make any sense (but wouldn't be illegal), if AF wants AZ to disappear they just have to wait a few days, no need to put any more money in it !

Also for a hub in northern Italy I wonder if better connexions wouldn't be needed between Milano, Torino and Genoa (maybe also the northeast), to give people in the latter two incentive to use the airport. There is a brand new high speed line between Milano and Torino, but it doesn't go to any airport !

[Edited 2013-10-08 16:21:36]


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User currently offlinebreiz From France, joined Mar 2005, 1892 posts, RR: 2
Reply 151, posted (6 months 1 week 5 days 12 hours ago) and read 16617 times:

Quoting miaintl (Reply 138):
There is a news report that AZ might stop flying in 5 days.

According to some news reports yesterday, Eni may stop to supply fuel to Alitalia on Saturday, unless shareholders do something about debts and turnaround plan.


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 152, posted (6 months 1 week 5 days 12 hours ago) and read 16826 times:

Quoting Aesma (Reply 150):
Also for a hub in northern Italy I wonder if better connexions wouldn't be needed between Milano, Torino and Genoa (maybe also the northeast), to give people in the latter two incentive to use the airport. There is a brand new high speed line between Milano and Torino, but it doesn't go to any airport !

You cannot have a real hub without a hub carrier. It would be possible to have a major point-to-point airport at MXP, but this would require closing minor airports in Northern Italy, applying existing rules at LIN (which theoretically limit daily flights but are completely disregarded) and, yes, have better train connections to MXP (which however will not happen until MXP reaches a sufficient number of passengers to justify costs, especially regarding high-speed rail: the rails are already there, it is high-speed trains that are missing ...).


User currently offlineOOer From United States of America, joined Oct 2005, 1440 posts, RR: 2
Reply 153, posted (6 months 1 week 5 days 4 hours ago) and read 16480 times:

http://news.yahoo.com/alitalia-eni-d...-continuit-100246614--finance.html

ENI to stop fuel delivery for Alitalia on Saturday unless they get this mess figured out. In the meantime Alitalia keeps losing 600,000 Euro per day.

Just let this tired old horse die...


User currently offlineRGFC From Italy, joined Jul 2013, 55 posts, RR: 0
Reply 154, posted (6 months 1 week 5 days 3 hours ago) and read 16381 times:

Quoting OOer (Reply 153):
Just let this tired old horse die...


Fully agree ! It's true that I never fly AZ or SkyTeam, but also for those who do, somebody will take over AZ's routes (and there are so few AZ long-haul routes that at least in this regard AZ won't be missed).

Unfortunately the Italian government is desperately trying to save AZ at any cost: the latest is that the Italian Railways (!) would purchase a share of AZ in order to negotiate in a somewhat stronger position with AF/KL (i.e. in order not to completely capitulate to AF/KL).


User currently offlineseahawk From Germany, joined May 2005, 578 posts, RR: 0
Reply 155, posted (6 months 1 week 5 days 2 hours ago) and read 16301 times:

AF/KL should be happy if they do not get AZ. AZ is heavily influenced by politics, has a workforce which is proud and ready to strike even when in a hopeless financial position, the infrastructure in Italy allows no working business case, FCO lacks economic strength, MXP / LIN compete with each other and make a hub there impossible. Only if AZ dies, the aviation industry in Italy can adjust and prosper again. Air Dolomiti will probably grow quickly.

User currently offlinemiaintl From United States of America, joined Jun 2010, 979 posts, RR: 0
Reply 156, posted (6 months 1 week 5 days 2 hours ago) and read 16248 times:

I heard that AZ just got a 500 million loan. On a separate note if AZ goes under does anyone see AA taking up the MIA-FCO route or would LH relaunch MIA-MUC to scoop up the Italian traffic?

User currently offlineAzure From France, joined Dec 2012, 598 posts, RR: 16
Reply 157, posted (6 months 1 week 4 days 23 hours ago) and read 16027 times:

Quoting RGFC (Reply 154):
Unfortunately the Italian government is desperately trying to save AZ at any cost: the latest is that the Italian Railways (!) would purchase a share of AZ in order to negotiate in a somewhat stronger position with AF/KL (i.e. in order not to completely capitulate to AF/KL).

How would the EU react if a state-owned entity invest in AZ ? It would be a de facto nationalization. The case would be aggravated if the Italian Railways (FS) are involved as this AZ/FS merger would result in a dominating position on some routes.
Per EU regulations, a direct cash investment in AZ by the Italian State (or a state-owned entity) would have to be paid back short term (re: Malev).
I find the whole story pretty pathetic. It looks like no-one in Italy has learnt their lesson from the 2008 tragicomedy.



Quoting seahawk (Reply 155):
Only if AZ dies, the aviation industry in Italy can adjust and prosper again. Air Dolomiti will probably grow quickly.

If AZ dies, many things can happen.

I doubt Air Dolimiti would grow significantly, its cost base is not competitive enough.

A more likely scenario could be that FR and U2 take over the regional ops (domestic and European). The timing would be right, they would have many aircraft available as they keep part of their fleet grounded during the winter season. They would have time to reorganize for the summer season.

The LCCs would be the main beneficiaries of an AZ collapse, no doubt.

On long-haul, foreign carriers would increase capacity/frequency where needed, subject to government approval and aircraft availability. There wouldn't be any issue with the US (open sky).

But I believe the Italian government will do it utmost to keep AZ alive, at any cost (that is for the taxpayers).
It is a matter of national pride for them...



Quoting miaintl (Reply 156):
heard that AZ just got a 500 million loan.

No. AZ needs 500 million euro to survive. It has no money to pay for its gas bills, do not expect banks to grant a half billion loan until it can prove it has a healthy business case. Bear in mind that the European banks are closely monitored by the European Central Bank and rating agencies.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineseahawk From Germany, joined May 2005, 578 posts, RR: 0
Reply 158, posted (6 months 1 week 4 days 14 hours ago) and read 15734 times:

Quoting Azure (Reply 157):
If AZ dies, many things can happen. I doubt Air Dolimiti would grow significantly, its cost base is not competitive enough. A more likely scenario could be that FR and U2 take over the regional ops (domestic and European). The timing would be right, they would have many aircraft available as they keep part of their fleet grounded during the winter season. They would have time to reorganize for the summer season. The LCCs would be the main beneficiaries of an AZ collapse, no doubt.On long-haul, foreign carriers would increase capacity/frequency where needed, subject to government approval and aircraft availability. There wouldn't be any issue with the US (open sky).But I believe the Italian government will do it utmost to keep AZ alive, at any cost (that is for the taxpayers).It is a matter of national pride for them...

I agree with you, but the state influence keeps the industry out of balance. AZ can not reform, other Italian airlines have no hope to grow into the market. The Italian state just drags it out, until the EU will force them to kill AZ and then the whole market will fall to the LCCs. If hte LCCs control LIN-FCO the Italian market will be very hard to get into for any competition. But that will also impact longhaul, as there will be no connection for longhauls going to Italy. In the end they will end up with with LCCs controlling inter-european and Italian traffic, with LH group, IB/BA and AF/KLM drawing the long haul pax from Italy. The South of Italy will be probabaly be cut-off by some margin.