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Alitalia In Cash Crisis - Part 2  
User currently offlineLAXintl From United States of America, joined May 2000, 25196 posts, RR: 48
Posted (9 months 3 weeks 2 days 10 hours ago) and read 19040 times:

Since our first thread ( Alitalia In Cash Crisis (by LAXintl Sep 3 2013 in Civil Aviation) ) has gotten very long lets continue with a new one here.

Latest news:

o AFKL has taken a €119mil impairment charge for its 25% holdings in AZ.
o AZ board meeting scheduled on Wednesday Nov 13th. Rumored announcement of staff cuts, and discuss recapitalization
o Thursday Nov. 14th deadline for needed €300mil recapitalization.
o AFKL says its unwilling to invest further in AZ unless "strict industrial, social and financial conditions” are agreed to.

=


From the desert to the sea, to all of Southern California
111 replies: All unread, showing first 25:
 
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1396 posts, RR: 2
Reply 1, posted (9 months 3 weeks 2 days 9 hours ago) and read 18977 times:

Alitalia says it looking at a " South-East Asian" partner if Air France backs out.

http://finance.yahoo.com/news/alital...k-asian-partner-air-120436016.html

I dont know what their definition of SE Asia is, but I believe common definition is areas like Malaysia, Indonesia, Singapore, Thailand, Vietnam etc.


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 2, posted (9 months 3 weeks 2 days 5 hours ago) and read 18728 times:

That's a good Definition for the area.

The problem with a white knight from there is, they cannot pump money endlessly simply because AZ would lose it's citizenship that way. Cash loans would qualify as equity.

Air Cargo Germany got it's AOP revoked that way.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinebobnwa From United States of America, joined Dec 2000, 6465 posts, RR: 9
Reply 3, posted (9 months 3 weeks 2 days 3 hours ago) and read 18570 times:

Quoting mercure1 (Reply 1):
I dont know what their definition of SE Asia is, but I believe common definition is areas like Malaysia, Indonesia, Singapore, Thailand, Vietnam etc.


Why on earth would an airline from any of those countries want to invest in Alitalia


User currently offlinezkeye From New Zealand, joined May 2005, 241 posts, RR: 2
Reply 4, posted (9 months 3 weeks 1 day 20 hours ago) and read 18359 times:

Quoting bobnwa (Reply 3):
Why on earth would an airline from any of those countries want to invest in Alitalia

You could also ask why on earth would anyone from anywhere at all would want to invest in Alitalia?



Bring out the gimp
User currently offlinemiaintl From United States of America, joined Jun 2010, 1049 posts, RR: 0
Reply 5, posted (9 months 3 weeks 1 day 10 hours ago) and read 18063 times:

I wonder why AZ cannot compete efficiently against low-cost carriers, whilst other Euro heavies can? Is it because AZ has a weak insufficient hub?

User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1389 posts, RR: 1
Reply 6, posted (9 months 3 weeks 1 day 6 hours ago) and read 17847 times:

The board meeting started two hours ago, Reuters reckon:

AFKL plays hardball: no structural changes, no cash, but actually they would like to do a deal
The unions are promising a ""very, very hard" response to job cuts (rather impedes AFKL's aspirations)
The board are likely to avoid the confrontation by putting of any decision and extending the funding deadline (as if AFKL are going to change their mind just because more time passes?)
No one seems to give much credence to the "asian partner"

My guess ... eventually there is a fudge: some cuts, some AFKL money, not much confrontation (token strike), not much political fallout ... and we are back here again soon for "Alitalia In Cash Crisis - Part 145"   

[Edited 2013-11-13 11:12:03]


Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,BA11,BU31,B190, B461,B462,B463,(..50 types..),VC10,WESX
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1396 posts, RR: 2
Reply 7, posted (9 months 3 weeks 1 day 2 hours ago) and read 17608 times:

Media says following;

** Board approved proposed management business plan revision which calls for job cuts (maybe 2000), and further mediumhaul fleet reduction but the AFKL representatives vote against plan.
** Capital increase deadline moved to Nov.27th.
** Two Italian banks already commit to providing €130mil of needed €300mil.
** AFKL must put in €75 million or have its 25% share holding drop to below 10%
** Italian post is apparent potential investor for €75 million. They have board meeting on Nov.20 to approve
** Italy transport minister say AZ has other partner options, and AFKL must either stay involved or get out of way.


User currently offlineNatflyer From United States of America, joined Oct 2013, 140 posts, RR: 1
Reply 8, posted (9 months 3 weeks 1 day ago) and read 17494 times:

Quoting mercure1 (Reply 7):

Looks pretty desperate, because the Italian government can't pump more money into Alitalia directly, to make the Italian Post a "shareholder".

And on the story goes...


User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 9, posted (9 months 3 weeks 11 hours ago) and read 17254 times:

It was expected but it is now confirmed. In a press-release, AFKL announces it will not subscribe to the capital increase.

Ironically the press release is titled : Air France-KLM confirms its commitment to remain a partner of Alitalia

Consequently AFKL stake in AZ will drop to circa 10%. AFKL will loose it veto power over potential new investors, although I doubt there are any interested despite the declarations of the Italian government...

The attitude of the latter has been highly counter-productive. Political interference in a private company can only result in discouraging investors, including the top shareholder.

Eventually AZ will run out of cash again and will be placed under special administration. This might be the only way to solve AZ chore issue, ie its debt.




Quoting bobnwa (Reply 3):
Why on earth would an airline from any of those countries want to invest in Alitalia

KE has invested in CZ. And Italy is a much larger market than the Czech Republic !
However I do not expect SQ, MH, TG or any airline invest a cent in AZ without imposing the same conditions as AFKL...




Quoting miaintl (Reply 5):
I wonder why AZ cannot compete efficiently against low-cost carriers, whilst other Euro heavies can? Is it because AZ has a weak insufficient hub?

AZ is not a "heavy", it is half the size of KL alone. Its cost base is too high compared with the LCCs, and it does not have the financial resources to set up its own LCC, unlike LH with Germanwings or AFKL with Transavia. Btw, AFKL and the LH group are not doing quite well on their regional market...



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, 1049 posts, RR: 0
Reply 10, posted (9 months 3 weeks 9 hours ago) and read 17111 times:

I wonder if had AZ never left its MXP hub for Rome in 2008, would it be facing the crisis it is facing today. Because with a weak hub AZ has nothing to offer. If LIN closed at MXP had remained AZ hub then things would be fine today. I know that that is an over simplistic analysis, but it seems to be the gist of the problem. I am glad this article agrees with me.
User currently offlineLAXintl From United States of America, joined May 2000, 25196 posts, RR: 48
Reply 11, posted (9 months 2 weeks 3 days 6 hours ago) and read 16471 times:

Unions say AZ will cut approx 2,500 jobs including pilots, cabin and ground staff

Company has meeting scheduled for Thursday with unions.

http://finance.yahoo.com/news/alitalia-cut-2-500-2-190202264.html

=



From the desert to the sea, to all of Southern California
User currently offlinereadytotaxi From United Kingdom, joined Dec 2006, 3232 posts, RR: 2
Reply 12, posted (9 months 2 weeks 3 days 6 hours ago) and read 16450 times:

A "to big to fail" or a staggering corpse?  


you don't get a second chance to make a first impression!
User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7572 posts, RR: 3
Reply 13, posted (9 months 2 weeks 3 days 5 hours ago) and read 16326 times:

Any news yet on aircraft and routes to be chopped.

User currently offlineJimJupiter From Germany, joined Sep 2011, 245 posts, RR: 0
Reply 14, posted (9 months 2 weeks 3 days 5 hours ago) and read 16303 times:

What are those news?


One is born, one runs up bills, one dies.
User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7572 posts, RR: 3
Reply 15, posted (9 months 1 week 6 days 11 hours ago) and read 15827 times:

http://www.ch-aviation.ch/portal/new...ad-for-help-with-saving-alitalia#!

"Alitalia (AZ, Rome Fiumicino) has reportedly turned its attention back towards Etihad Airways (EY, Abu Dhabi Int'l) in the hopes of finding a strong potential investor. Italy's Teleborsa says Italian premier, Enrico Letta, has dispatched an envoy to Abu Dhabi, under the guise of endorsing Dubai's candidacy for Expo 2020, to resume negotiations with Etihad. The airline's grapevine speaks of a potential 2'500 job cuts of which 1'000 would come from contract non-renewals while the other 1'500 would be straight firings. The bad news continues to roll in for the ailing Italian national carrier after Antitrust regulators fined it EUR120'000 for "unfair business practices."

It seems as if they are going to try to involve Etihad.

However, my understanding is that normal limits on non EU ownership would apply.

Also, doubtless Etihad will insist on cuts at AZ as well.

Promises to be interesting.


User currently offlineghost77 From Mexico, joined Mar 2000, 5219 posts, RR: 51
Reply 16, posted (9 months 1 week 6 days 4 hours ago) and read 15566 times:

If no cash is given on Nov 27th will AZ collapse?

Will the government let AZ die?

What are the other Italian carriers?

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlineUALWN From Andorra, joined Jun 2009, 2763 posts, RR: 2
Reply 17, posted (9 months 1 week 6 days 3 hours ago) and read 15481 times:

Quoting ghost77 (Reply 16):
If no cash is given on Nov 27th will AZ collapse?

Come on, I have an BCN-FCO flight on AZ booked for Nov. 28th!



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User currently offlineBurchfiel From United States of America, joined Jul 2007, 368 posts, RR: 0
Reply 18, posted (9 months 1 week 5 days 22 hours ago) and read 15298 times:

The Pope uses AZ more than any other airline -- if Alitalia fails what is he going to do? Perhaps travel on Ryanair, since he's trying to make the Papacy a simpler, less ornate institution.

User currently offlinelaca773 From United States of America, joined Nov 2004, 4009 posts, RR: 2
Reply 19, posted (9 months 1 week 5 days 19 hours ago) and read 15184 times:
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Perhaps at this point, AZ needs to file bankruptcy the way SR did. They came back as LX, and have been hanging in there. It sounds like the unions and employee groups are not open to changes, and survival wage cuts.
To survive, they need to start over from the ground up. I can see AFKL stepping in, and evolve the management team to get them moving in the right direction.


User currently offlinelollomz From Italy, joined Sep 2005, 263 posts, RR: 0
Reply 20, posted (9 months 1 week 5 days 18 hours ago) and read 15129 times:
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Have you ever seen the Alitalia HQ in Rome? I think it's bigger than the one of AA. Why a can of coke cost to AF/KLM 2 euros and 5 to AZ? Why the stop to fly the planes they own and fly the planes they lease? Why someone would buy an airline Made to loose money and is not indipendent by politic games??? I'm so tired to see this every day. I really hope one day someone will not tolerate this behaviour anymore!!!

User currently offlineOzarkD9S From United States of America, joined Oct 2001, 5076 posts, RR: 21
Reply 21, posted (9 months 1 week 5 days 14 hours ago) and read 14927 times:

Quoting laca773 (Reply 19):


Perhaps at this point, AZ needs to file bankruptcy the way SR did. They came back as LX, and have been hanging in there.

Not that simple in the case of SR/LX. AZ would need to liquidate while Air One might emerge as the new "Italiana" or something along those lines. IF there is enough separation between AZ and Air One at this point. I admit I'm not really up on the AZ/Air One corporate structure. If Air One is still a separate legal entity it "might work". Of course they'll be riots in the streets but.....

And for the record SR did not come back, a new national carrier emerged using the LX certificate and structure. Not sure if that could happen the same way in Italy. Perhaps someone with more knowledge on Italian corporate law could enlighten us.



Next Up: STL-LGA-RIC-ATL-STL
User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 22, posted (9 months 1 week 5 days 11 hours ago) and read 14772 times:

Quoting LAXintl (Reply 11):
Unions say AZ will cut approx 2,500 jobs including pilots, cabin and ground staff

So the Italians authorities did their utmost to discourage AFKL to takeover AZ out of fear it would cut jobs. They are now left without an international partner (and struggling to find one) but they still have to cut jobs. Very successful move.



Quoting bennett123 (Reply 15):
It seems as if they are going to try to involve Etihad.

However, my understanding is that normal limits on non EU ownership would apply.

Also, doubtless Etihad will insist on cuts at AZ as well.


   So far EY has remained silent since its acquisition of Darwin Airlines.
In fact the Italian government and AZ want the cash but also want to keep control of the airline. Unsolvable equation.



Quoting ghost77 (Reply 16):
If no cash is given on Nov 27th will AZ collapse?

Will the government let AZ die?

AZ has secured only € 130 Mi so far (out of the € 300 Mi it seeks to obtain).
Meanwhile AZ has started to sell its real estate, surely not a good sign.
If it fails to get the € 300 Mi by Nov 27th, its chances of survival are limited to a couple of months.
The main issue is the abysmal debt of AZ. Even if the airline was operationally profitable it could not pay back the interests of the loans.
I can think of 2 scenarios :
- AZ debt is restructured with the help of the Italian government. It would make it more appealing for an investor. AFKL (or EY) could come back under the condition it is assured to get the full control of the airline (with further job cuts).
- The Italian government does not write off the debt and AZ will die, sooner rather than later. I know they are working at building a stand-alone business model for the airline. Good luck to them !



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7572 posts, RR: 3
Reply 23, posted (9 months 1 week 5 days 11 hours ago) and read 14700 times:

What real estate have they sold?.

Perhaps it just wasn't required.


User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 24, posted (9 months 1 week 5 days 10 hours ago) and read 14629 times:

Quoting bennett123 (Reply 23):
What real estate have they sold?.

Perhaps it just wasn't required.

Perhaps.
Source (in French) : http://www.aerobuzz.fr/spip.php?article4402

Quote:
The fact remains that Alitalia, concerned about its immediate financial difficulties, is seeking by all means to find cash. It has chosen to sell part of its real estate, various buildings estimated sixty million euros. This choice has not been announced publicly, but appears in the classifieds of the latest issue of U.S. magazine Aviation Week. Offers must be submitted no later than March 21. That speaks volumes about the seriousness of the situation but also indicates Alitalia hopes to be still alive at the end of winter.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinelollomz From Italy, joined Sep 2005, 263 posts, RR: 0
Reply 25, posted (9 months 1 week 5 days 8 hours ago) and read 14815 times:
Support Airliners.net - become a First Class Member!

Quoting OzarkD9S (Reply 21):

Air One is part of AZ.....


User currently offlineghost77 From Mexico, joined Mar 2000, 5219 posts, RR: 51
Reply 26, posted (9 months 1 week 5 days 3 hours ago) and read 14677 times:

Quoting Azure (Reply 22):
die, sooner rather tha

Thanks for the info!

Selling real state as last resort.. ok, 60M more... could work!!! But after this...? There won't be more properties!

What a sad thing to see this beautiful airline go belly up! Maybe time to start from scratch or return planes and improve things and later time to think about expansion!

g77



Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
User currently offlinemiaintl From United States of America, joined Jun 2010, 1049 posts, RR: 0
Reply 27, posted (9 months 1 week 4 days 18 hours ago) and read 15076 times:

I wonder if AZ goes bankrupt, whether a startup airline will follow? You know kind of like the SR/LX case.

User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1389 posts, RR: 1
Reply 28, posted (9 months 1 week 1 day 14 hours ago) and read 14464 times:

Quoting miaintl (Reply 27):
I wonder if AZ goes bankrupt, whether a startup airline will follow?

I'm not at all sure anyone in Italy will get the chance to fill the AZ void:
VY (aka IAG) has announced major expansion at FCO from S14: 8 aircraft based, 24 new routes (in addition to 8 already served) - 7 of these will be domestic routes, all major AZ routes
FR has announced major expansion at FCO starting next month: 6 aircraft to be based, 3 new domestic routes (in addition to 6 served from CIA - to move to FCO)
EZY has announced a base at NAP from S14, reaching 20 routes / 130 flights per week from NAP

Rather ominously, and in a style that will be familiar to scholars of Rome from the time of Caesar, FR added:

"Ryanair also confirmed that it will increase these daily frequencies if Alitalia cuts back. Ryanair has also offered to use its low fare flights to feed into Alitalia’s international network to/from Rome Fiumicino. Ryanair has for example offered to carry Alitalia passengers at one-way fares from just €50 which will enable Alitalia to significantly reduce the costs of its feed traffic on these domestic routes to Rome Fiumicino. Ryanair has also requested a meeting with Alitalia to examine any other opportunities which may exist for co-operating with and assisting Alitalia in its current restructuring."



Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,BA11,BU31,B190, B461,B462,B463,(..50 types..),VC10,WESX
User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 29, posted (9 months 1 week 1 day 13 hours ago) and read 14335 times:

Quoting GCT64 (Reply 28):
I'm not at all sure anyone in Italy will get the chance to fill the AZ void:

The void after the possible bankruptcy of AZ would be filled by the LCCs on short-haul. We are just seeing the beginnings. I am not sure whether these LCCs are betting on the demise of Alitalia or putting more pressure to accelerate its fate...Anyway, they will be the clear winners.
For the long-haul business, the Euro majors will continue to feed their respective hubs and the non-European airlines (EY, EK, SQ, etc) will increase frequency and capacity if needed.
We already discussed these possibilities in part I of this thread.

Like you, I am not sure this scenario would leave space for a start-up airline based in Italy.

However AFKL can still play a role. It has written-off its stake in Alitalia but nonetheless remains a shareholder. Should AZ run out of cash again (very likely), AFKL (but it can be another investor too) could negotiate a deal with the other shareholders and the Italian government to save whatever could be saved (the brand, some jobs, slots, etc.). I am pretty sure the government of PM Letta wants to avoid the total demise of the flag carrier.

Today Nov 27th is the deadline for the shareholders to say whether they subscribe to the capital increase.
If AZ succeeds to find € 300 Mi as planned, it can survive until next summer.
If not, its lifespan in its current form will be drastically reduced.
Last time I checked, AZ had secured only € 130 Mi out of the € 300 Mi.
We'll see !



Quoting GCT64 (Reply 28):
Rather ominously, and in a style that will be familiar to scholars of Rome from the time of Caesar

Lol ! You are right, it sounds very imperial !
But there is more to it. It is a clear change of strategy for FR, as we are discussing here : Ryanair Planning Change In Strategy? (by factsonly Nov 14 2013 in Civil Aviation)



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinesenatorflyer From UK - England, joined Jul 2012, 33 posts, RR: 0
Reply 30, posted (9 months 1 week 11 hours ago) and read 13808 times:

So the deadline was yesterday but so far we have not heard anything... Good or bad in your opinion?

User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 31, posted (9 months 1 week 11 hours ago) and read 13773 times:

Quoting senatorflyer (Reply 30):
So the deadline was yesterday but so far we have not heard anything... Good or bad in your opinion?

Well, good or bad news, it all depends on your expectations  

More seriously, AZ said it would release the result of the cash call this morning. The absence of information so far, from Alitalia and the Italian press, may indicate things did not turn well.

I suspect the new shareholder, the state-owned Poste Italiane, is reluctant to confirm its participation in the capital increase that should amount to € 75 Mi.

The issue here is the compliance with the EU regulations on state aid.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinesenatorflyer From UK - England, joined Jul 2012, 33 posts, RR: 0
Reply 32, posted (9 months 1 week 10 hours ago) and read 13716 times:

There we go. Does not sound too good I think...

http://uk.reuters.com/article/2013/1.../28/alitalia-idUKL5N0JD31G20131128


User currently offlineDDR From Switzerland, joined Sep 2013, 155 posts, RR: 1
Reply 33, posted (9 months 1 week 10 hours ago) and read 13662 times:

Quoting Azure (Reply 29):
The void after the possible bankruptcy of AZ would be filled by the LCCs on short-haul. We are just seeing the beginnings. I am not sure whether these LCCs are betting on the demise of Alitalia or putting more pressure to accelerate its fate..

This is very true. Soon there will be no markets left for AZ    The other carriers are like sharks and they have smelled the blood in the water. I believe it is just too late for Alitalia. It is sad to see another airline from my youth go away but the world did survive the loss of Sabena and Swissair and it will go on without Alitalia.



I am a fan of Swiss and Airbus
User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 34, posted (9 months 1 week 9 hours ago) and read 13499 times:

Quoting senatorflyer (Reply 32):
There we go. Does not sound too good I think...

http://uk.reuters.com/article/2013/1...31128

I think so too. (thanks for the link)
- AZ secured only € 173 Mi (when it planned on € 300 Mi)
- The cash call will continue with a second phase. The deadline was postponed once and now we learn there will be a second phase. It indicates the so-called first phase failed, despite the optimistic wording.
- There is not a word about Poste Italiane that might not be part of the deal (yet).

With this capital increase of € 173 Mi, AZ can survive until March I believe. So we can keep this thread open  .



Quoting DDR (Reply 33):
I believe it is just too late for Alitalia.

Could be.
I wonder if AZ did not make a mistake when it turned down FR's offer yesterday. Its short-haul business is loss-making, its long-haul is profitable. A partnership with FR as a feeder of its intercontinental network would have made sense IMHO. This alliance between an ailing Legacy and an aggressive LCC would have been a revolution in the world of commercial aviation ! Of course it would have resulted in a leaner Alitalia only focusing on long-haul (and it would have face lots of opposition in the country), but the business model can work.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineviasa From Switzerland, joined Jun 2005, 1875 posts, RR: 6
Reply 35, posted (9 months 6 days 17 hours ago) and read 13045 times:

Another report about Alitalia's fleet. They were down by nearly 20%: http://www.ch-aviation.ch/portal/new...as-it-parks-nearly-20-of-its-fleet

The active A321 fleet is down by just nine aircrafts. Will they phase-out the A321s?


User currently offlineOOer From United States of America, joined Oct 2005, 1466 posts, RR: 2
Reply 36, posted (9 months 6 days 15 hours ago) and read 12898 times:

Alitalia is trying to shrink to profitability and making the worst possible business decisions (like leaving MXP for FCO) while also raking up more and more debt.

Put AZ out of it's misery and let other airlines fill the void.


User currently offlineAquila3 From Italy, joined Nov 2010, 262 posts, RR: 0
Reply 37, posted (8 months 3 weeks 5 days 8 hours ago) and read 12048 times:

News (ANSA) say that tomorrow the new business plan will be presenteted. It will be hard to swallow, 1900 layoffs, between them 280 pilots and 350 F.A.


chi vola vale chi vale vola chi non vola è un vile
User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7572 posts, RR: 3
Reply 38, posted (8 months 3 weeks 5 days 4 hours ago) and read 11754 times:

Given that most aircraft have about 2 FA per pilot, this does not seem to stack up.

User currently offlineCPHFF From Sweden, joined Aug 2011, 140 posts, RR: 0
Reply 39, posted (8 months 3 weeks 4 days 18 hours ago) and read 11470 times:

Reading through the posts, there seem to be a lot of users on here that believe that the biggest part of AZ's problem is that they didn't keep and expanded MXP as a hub. I'm sure that some of the problems can be attributed to that.

How ever, it is my (and several colleagues) view that their appauling Customer Service and flight experience is a big contributor as well. I don't beleive they get any repeat business from non-Italians unless it is the only flight option available.

Also, their staff is very unproductive. Have you ever been at an Alitalia counter in FCO or MXP. 3-4 women behind the counter, of which 1-2 are actually serving customers. The others seem to be chatting with each other. Extremely frustrating when you've just had your flight cancelled. I feel the employees including cabin crew have a serious "mañana attitude", and we as passengers should be damn lucky that we are allowed to fly with them.



Detroit is bankrupt. Don't forget to thank UAW folks!
User currently offlineUALWN From Andorra, joined Jun 2009, 2763 posts, RR: 2
Reply 40, posted (8 months 3 weeks 4 days 16 hours ago) and read 11355 times:

Quoting CPHFF (Reply 39):
How ever, it is my (and several colleagues) view that their appauling Customer Service and flight experience is a big contributor as well.

I have flown a few segments with AZ in the last couple of months and I cannot agree. Flight experience and customer service were OK, in line with most other European legacies, including SK, for instance, which I also flew on earlier in the year.

Quoting CPHFF (Reply 39):
I don't beleive they get any repeat business from non-Italians unless it is the only flight option available.

Why would Italians behave differently from non-Italians?



AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/AB6/310/319/320/321/330/340/380
User currently offlineCPHFF From Sweden, joined Aug 2011, 140 posts, RR: 0
Reply 41, posted (8 months 3 weeks 4 days 14 hours ago) and read 11177 times:

Quoting UALWN (Reply 40):
Why would Italians behave differently from non-Italians?

My Italian colleagues and many other Italians fly AZ because of loyalty and "National Pride", just like a lot of Germans prefer Luftwaffe...........

Sorry if I was unclear UALWN



Detroit is bankrupt. Don't forget to thank UAW folks!
User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 42, posted (8 months 3 weeks 4 days 13 hours ago) and read 11047 times:

"Elle a en effet levé les 225 millions nécesaires pour que la Poste italienne mettre de son côté 75 millions d’euros, selon une source anonyme citée par le Wall Street Journal."

http://www.air-journal.fr/2013-12-10...et-225-millions-deuros-592286.html

According to this article dated 10 Dec, Alitalia has raised the 225 million euros necessary for Poste Italienne to put in 75 million euros according to an anonymous source cited by Wall Street Journal.


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 43, posted (8 months 3 weeks 4 days 11 hours ago) and read 10924 times:

Quoting CPHFF (Reply 41):
just like a lot of Germans prefer Luftwaffe...........

with a market share of just about 35% that would mean something like 2/3rds of Germans using air Services have gone AWOL!

So much to nationalism.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineUALWN From Andorra, joined Jun 2009, 2763 posts, RR: 2
Reply 44, posted (8 months 3 weeks 4 days 11 hours ago) and read 10864 times:

Quoting CPHFF (Reply 41):
My Italian colleagues and many other Italians fly AZ because of loyalty and "National Pride"

Really? Do you think that Italians would stay loyal to a dismal airline?



AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/AB6/310/319/320/321/330/340/380
User currently offlineJimJupiter From Germany, joined Sep 2011, 245 posts, RR: 0
Reply 45, posted (8 months 3 weeks 4 days 10 hours ago) and read 10820 times:

Quoting CPHFF (Reply 39):
there seem to be a lot of users

Actually not that many, if you look closely.  



One is born, one runs up bills, one dies.
User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7572 posts, RR: 3
Reply 46, posted (8 months 3 weeks 4 days 3 hours ago) and read 10585 times:

www.ch-aviation.ch is reporting an investment of e15M by Antonio Percassi, through his company Odissea Holdings.

AZ seem to be getting a lot of (mostly Italian) investors come on board.


User currently offlinetyler81190 From United States of America, joined Feb 2009, 687 posts, RR: 0
Reply 47, posted (8 months 3 weeks 4 days 3 hours ago) and read 10517 times:

Is it a bad sign when your joint venture partners/alliance members (ex... DL, VS, KE etc) do not even think about offering to help?

Have most of SkyTeam basically just called AZ a lost cause?


User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 48, posted (8 months 3 weeks 4 days 2 hours ago) and read 10482 times:

Quoting bennett123 (Reply 46):
www.ch-aviation.ch is reporting an investment of e15M by Antonio Percassi, through his company Odissea Holdings.

It's a mystery to me why AZ would attract any funds from serious investors. As I understand things the capital secured will stop AZ going bust in the immediate future but will be wiped out by ongoing losses leaving AZ requiring more funds in a few months to avoid it going bust.


User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 49, posted (8 months 3 weeks 3 days 16 hours ago) and read 10225 times:

Quoting art (Reply 42):
According to this article dated 10 Dec, Alitalia has raised the 225 million euros necessary for Poste Italienne to put in 75 million euros according to an anonymous source cited by Wall Street Journal.

This seems to be confirmed (subject to a formal announcement by AZ).
However the cash call saga has shown the difficulties for AZ to attract investors, and even to persuade its own shareholders.



Quoting bennett123 (Reply 46):

www.ch-aviation.ch is reporting an investment of e15M by Antonio Percassi, through his company Odissea Holdings.

Percassi has close business ties with the bank that is going to become AZ top shareholder, Intesa San Paolo. This latter has reportedly granted € 150 Mi in loans to Percassi...
Source
"Combinazione" or creativity, it's yours to decide...



Quoting tyler81190 (Reply 47):
Is it a bad sign when your joint venture partners/alliance members (ex... DL, VS, KE etc) do not even think about offering to help?

Have most of SkyTeam basically just called AZ a lost cause?

AFKL has offered to help before the cash call (it was ready to inject hundreds millions of euros) but its conditions were not accepted by the Italians. The issue is the abysmal debt - let alone political interference.
The trouble is getting worse now that AZ lenders will be its biggest shareholders after the capital increase.

Alitalia as a stand-alone carrier is a lost cause, yes.
With a major partner, it has potential. Italy remains the 4th European market in commercial aviation.

As for the Skyteam partners, the major ones have already invested in other European airlines (DL/VS - KE/OK).
SU does not have the financial resources.
I do not see AM, VN or GA...
May be the Chinese airlines, like HU in ZI. But they do not seem in a hurry.

I do not see any other possible industrial partners than AFKL (or EY).



Quoting art (Reply 48):
As I understand things the capital secured will stop AZ going bust in the immediate future but will be wiped out by ongoing losses leaving AZ requiring more funds in a few months to avoid it going bust.

Give it 6 months, not more.
The CEO rules out to cut jobs, not to displease the unions.
Source : Reuters

Quote:
Alitalia's management presented details of its revised industrial plan to trade unions on Tuesday, reassuring them that feared layoffs of thousands of people would not be part of its moves to return the airline to profitability.



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, 6617 posts, RR: 9
Reply 50, posted (8 months 3 weeks 3 days 16 hours ago) and read 10164 times:

Well the other options are what is happening in some European countries, asking for more work for the same salary (not helpful if you don't have more work) or giving less money for the same work.


New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 51, posted (8 months 3 weeks 3 days 15 hours ago) and read 10160 times:

Quoting Azure (Reply 49):
The CEO rules out to cut jobs, not to displease the unions.
Source : Reuters

Quote:Alitalia's management presented details of its revised industrial plan to trade unions on Tuesday, reassuring them that feared layoffs of thousands of people would not be part of its moves to return the airline to profitability.

Then its moves to return the airline to profitability won't return it to profitability.


User currently offlineWolbo From Netherlands, joined Mar 2007, 487 posts, RR: 1
Reply 52, posted (8 months 3 weeks 3 days 15 hours ago) and read 10617 times:

Apparently Etihad intends to buy a 49% stake in Alitalia and will take a decision before Christmas.

http://gulfbusiness.com/2013/12/etihad-mulls-investment-in-alitalia


User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 53, posted (8 months 3 weeks 3 days 14 hours ago) and read 10547 times:

Quoting Aesma (Reply 50):
Well the other options are what is happening in some European countries, asking for more work for the same salary (not helpful if you don't have more work) or giving less money for the same work.

AZ will likely "freeze" or decrease the wages, but this will not be enough to "return" to a profitability it has known only once in the past ten years...



Quoting art (Reply 51):
its moves to return the airline to profitability won't return it to profitability.

In all fairness, the main issue is not the cost base. Granted, it remains uncompetitive against the LCCs (but AZ is not alone in this situation) but it is quite competitive on long-haul compared to LH or AF.

Again, the issue is the debt. It has been reported even if AZ was operationally as profitable as BA (which is not the case by far), it would not break-even due to the interests it has to pay to its lenders.

As a matter of fact, AZ has not attracted any investor so far but its current lenders and a state-owned entity. There would be turnaround specialists ready to invest in an airline if the issue was only the redundancy in the workforce.

I agree that AZ can and should realize large economies of scale, by merging its back-office and creating synergies with an industrial partner, that it should trim its loss-making short-haul network (that implies job cuts), but it also needs to restructure its debt.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 54, posted (8 months 3 weeks 3 days 14 hours ago) and read 10540 times:

Quoting Wolbo (Reply 52):
Apparently Etihad intends to buy a 49% stake in Alitalia and will take a decision before Christmas.

....and shape them up "Gulf style" .

Now, that will be fun to watch. Can it be that EY is going with open eyes into the same trap SR fell into? I thought that These guys are clever. With 49% already at the Limit they can't even buy up loans to turn into equity.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinepeterinlisbon From Portugal, joined Jan 2006, 507 posts, RR: 0
Reply 55, posted (8 months 3 weeks 3 days 14 hours ago) and read 10534 times:

Maybe us anetters should get together and buy Alitalia. We could run our board meetings online, and take suggestions from the public like "let's keep a few old 767s around for government charters" and "why are there no 747s and 777s flying within Europe" - we could soon change that!

I'm sure if the pope ends up on Ryanair they'll add an option to their booking page for popemobile rental.


User currently offline777 From Italy, joined Sep 2005, 515 posts, RR: 0
Reply 56, posted (8 months 3 weeks 3 days 10 hours ago) and read 10337 times:

Apparently EY is running a due diligence of AZ that should end in the next days.
The green/red light related to their entrance in AZ should come by Christmas.

Quote:
(Reuters) - Abu Dhabi's Etihad Airways is looking at the data room of Alitalia and is expected to take a decision on whether to invest in the troubled Italian carrier by Christmas, two sources familiar with the matter said on Wednesday.

Alitalia has just raised 300 million euros ($413 million) in a drawn-out capital increase which analysts said would keep the loss-making airline in the air for the next six months but it needs to find a strong partner willing to invest in its fleet and making it profitable in the longer term.

"Etihad has been in the data room as of some ten days and will complete the process by the end of this week," one source said.

Etihad is expected to decide on whether to buy a stake in Alitalia "just before Christmas", the source added.

Etihad and Alitalia declined to comment.

Not being a European carrier, Etihad can only take a stake of up to 49 percent in Rome-based Alitalia.

The two airlines were mentioned in the context of a possible tie-up earlier this year, but Etihad said at the time there were no talks beyond those on code sharing.

"An Etihad-led team is looking at numbers of Alitalia and this is not the first time it has done so," a second source close to Etihad said.

"Etihad's relationship with Alitalia is deeper than normal code sharing, it is a deep commercial partnership," the source added, pointing to the fact that the two airlines jointly operated flights between Abu Dhabi and the Italian cities of Rome and Milan.

"Alitalia desperately needs a strong partner and Etihad has been a serious investor (in other airlines)."

The source said, however, that it was not yet clear whether Alitalia could give Etihad the synergies it usually seeks when striking up alliances with other airlines.

The UAE carrier has been aggressively growing its international network over the past 10 years through minority stake purchases and codeshare agreements, as it competes with regional rivals Emirates Airline EMIRA.UL and Qatar Airways.
http://in.reuters.com/article/2013/1...talia-etihad-idINBRE9BA0ED20131211


User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 57, posted (8 months 3 weeks 3 days 10 hours ago) and read 10291 times:

Quoting 777 (Reply 56):
Etihad is expected to decide on whether to buy a stake in Alitalia "just before Christmas", the source added.

I would think that the management decision to maintain staff at current levels will give EY something to peruse until after Christmas.


User currently offlineAmsterdam From Netherlands, joined Mar 2011, 90 posts, RR: 0
Reply 58, posted (8 months 2 weeks 3 days 12 hours ago) and read 9801 times:

Dutch aviation news reports Etihad will invest 300 million € in Alitalia

http://www.luchtvaartnieuws.nl/nl-NL...teert_300_miljoen_euro_in_Alitalia


User currently offlineKarelXWB From Netherlands, joined Jul 2012, 11388 posts, RR: 33
Reply 59, posted (8 months 2 weeks 3 days 12 hours ago) and read 9783 times:

Quoting Amsterdam (Reply 58):
Dutch aviation news reports Etihad will invest 300 million € in Alitalia

Story in English:

Alitalia is close to getting a capital injection of about 300 million euros ($413 million) from Etihad Airways, three people familiar with the plan said.



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 60, posted (8 months 2 weeks 3 days 12 hours ago) and read 9792 times:

Also reported by Bloomberg :
Alitalia Said to Gain $413 Million Etihad Capital Backing

But even the Italian press is skeptical :
http://www.lastampa.it/2013/12/18/ec...mpRLEZAvbegQmTBYj6QxyI/pagina.html

I believe EY will make an offer next Monday, but it will set the same kind of conditions that AFKL did, including a debt restructuring.

EY cannot invest more than 49% in AZ, due to EU regulations. But thanks to the partnership between EK and AFKL, that has retained a 7% stake in AZ, the 2 airlines would effectively control AZ jointly.

It seems that LH will not appreciate the move. LH CEO gave an interview :
'Don’t sell Alitalia to the Sheikhs': Lufthansa CEO (in English)



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1396 posts, RR: 2
Reply 61, posted (8 months 2 weeks 2 days 9 hours ago) and read 9349 times:

So what is plan now that it looks like Etihad puts money into AZ?

It seems silly to simply take money and continue operations in similar fashion and continue to lose massive money.

There needs to real restructuring including appropriate staff adjustments.

Otherwise in one-year the Etihad money evaporate.


User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 62, posted (8 months 2 weeks 2 days 8 hours ago) and read 9317 times:

Quoting mercure1 (Reply 61):
So what is plan now that it looks like Etihad puts money into AZ?

It is too early to state that EY puts money into AZ. We should know by Tuesday, Dec. 24. EY has committed to give an answer before Christmas.

The offer has to be formalized. It will be conditional.

What this offer will be conditioned upon is not clear yet, but I expect a request for restructuring the debt, in the same way as AFKL did a couple of months ago.

Strangely, the same (political) source that unveiled a possible offer by EY also states that AFKL may "come back".

Let's wait and see.

Source / Reuters : http://www.reuters.com/article/2013/...talia-etihad-idUSL6N0JY2DZ20131219

Quote:

Dec 19 (Reuters) - Abu Dhabi's Etihad Airways is considering a possible investment of 300 million euros ($413 million) in troubled Italian carrier Alitalia, a political source close to the matter said on Thursday.

But the source added that other options besides Etihad were on the table for the loss-making carrier, including a possible re-engagement by Air France-KLM.

"It is possible that Air France-KLM may re-enter the game. The presence of the Arab group on European routes is irksome, it might reconsider," the source said.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1396 posts, RR: 2
Reply 63, posted (8 months 1 day 22 hours ago) and read 8652 times:

So Christmas come and go.

Did Alitalia get a present from Etihad?

Seems media and airlines are quiet. Did EY decide not to pursue strategic contribution to Alitalia?


User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 64, posted (8 months 1 day 14 hours ago) and read 8409 times:

Dear Mercure1, the latest news :

- EY CEO James Hogan will attend a press conference in Zürich on Thursday, Jan. 16th, 2014. He will speak about his investment in Darwin Airlines but he could also announce news on AZ
- EY would become AZ top shareholder with a 40-49% stake
- A new CEO would be appointed, rumors are he would be English and coming from the Asian market.

This has only been reported by one newspaper (in Italian) : Alitalia: vicino accordo con Etihad, a.d. sara' inglese

Let's wait and see.

There is also an interesting CAPA analysis underlining a possible takeover of AZ by EY (the first time CAPA mentions it to my knowledge) : Delta Airlines remains dismissive of Gulf carriers’ importance as its protectionist stance deepens

Quote:

For the moment Delta seems satisfied in avoiding the strategic relationships the Gulf carriers have forged with global airlines that until recently gave Emirates, Etihad and Qatar the cold shoulder. It has remained silent on Air France-KLM’s commercial tie-up with Etihad and Aer Berlin, and faces the possibility that Etihad will become a major investor in Alitalia after Air France declined to inject more capital into Italy’s ailing flag carrier.

The rest of the article deals with DL taking EK to court for the DXB-MXP-JFK service.

[Edited 2014-01-03 03:25:15]


I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 65, posted (8 months 1 day 14 hours ago) and read 8290 times:

Quoting mercure1 (Reply 61):
It seems silly to simply take money and continue operations in similar fashion and continue to lose massive money.

This is not a normal business where the aim is to run the business on sensible lines. This is Alitalia!

Quoting mercure1 (Reply 61):
There needs to real restructuring including appropriate staff adjustments.

This is not a normal business where the aim is to run the business on sensible lines. This is Alitalia!


User currently offlineHomobohemicus From Czech Republic, joined Mar 2013, 77 posts, RR: 0
Reply 66, posted (7 months 4 weeks 1 day 16 hours ago) and read 7485 times:

Now the news calls that EY will still take its time until a decision is made. As much as Alitalia and the Italian market is quite big, How much money will EY need to stuff into AZ to clear the debts, work on making the airline one that can compete with acceptable services. Mainly the politically sensitive issue of "political interference" into the airline as well as the "comfy" life of the staff in terms of benefits.

We all need to wait and see. Etihad usually announces their decision once everything is baked and ready.


User currently offlineLAXintl From United States of America, joined May 2000, 25196 posts, RR: 48
Reply 67, posted (7 months 4 weeks 1 day 8 hours ago) and read 7106 times:

Alitalia has its hands open again, and now asking for banks to further extend a €200mil loan from October for an additional €50mil to help counter liquidity crunch.

Italy's Alitalia seeks more bank funding
http://finance.yahoo.com/news/italys...lia-seeks-more-bank-132003463.html

=



From the desert to the sea, to all of Southern California
User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 68, posted (7 months 4 weeks 1 day 8 hours ago) and read 7073 times:

Quoting LAXintl (Reply 67):
Alitalia has its hands open again, and now asking for banks to further extend a €200mil loan from October for an additional €50mil to help counter liquidity crunch.

Italy's Alitalia seeks more bank funding
http://finance.yahoo.com/news/italys....html

Says: "The airline raised 300 million euros in an emergency capital increase last month, which analysts said would keep it flying for the next six months."

If they recently received 300 million euros which should take 6 months to throw away why the need for 50 million more?


User currently offlineKD5MDK From United States of America, joined Mar 2013, 321 posts, RR: 0
Reply 69, posted (7 months 4 weeks 1 day 6 hours ago) and read 6767 times:

Quoting art (Reply 68):
If they recently received 300 million euros which should take 6 months to throw away why the need for 50 million more?

So they can fly 7 months  


User currently offlineHomobohemicus From Czech Republic, joined Mar 2013, 77 posts, RR: 0
Reply 70, posted (7 months 4 weeks 22 hours ago) and read 6477 times:

Would that be an indication that they are not sure or not optimistic of EY making a decision. EY is looking into AZ's books and I am certain they will not like what they see, but would the size of the Italian market offset this beast's debts and bad management?

I did notice the latest news and they added that EY will probably take months to be sure and make a move (or at all).

I have to admit that AZ is starting to be ridiculous. Simply asking for money every 2 months and simply throw them in a deeeeeeep dark pit.

Very dramatic indeed and tragi/comic to say the least


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 71, posted (7 months 4 weeks 19 hours ago) and read 6323 times:

A bottomless pit is a bonanza in comparison with AZ.

The only way someone would even consider to invest would be a clean sheet Company, without debt, without Union contracts.

Which means in plain language : bankruptcy, the Name Alitalia and the Designator AZ could not be used by the new firm, new logo etc. in short

the role model Swissair / Swiss

Even that would ot solve the prpblems since the majority of shareholders would Need to be Italian and then you have the same guys again sitting around the table.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineIndianicWorld From Australia, joined Jun 2001, 2959 posts, RR: 0
Reply 72, posted (7 months 4 weeks 19 hours ago) and read 6318 times:

Just why EY would even bother with AZ baffles me.

Yes, it sits in a big market (Italy), but the airline just can't compete with its current cost base. Any moves to cut jobs will be met by militant union action so good luck trying to change its current downward spiral.

EY has its hands full as it is in Europe, with Air Berlin, Air Serbia and Darwin Airline (EY Regional), with its focus also required all over the globe with its other investments (ie. Jet Airways, Virgin Australia).


User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1389 posts, RR: 1
Reply 73, posted (7 months 4 weeks 17 hours ago) and read 6220 times:

Why anyone (although those closely associated with the Italian Government might well not operate logically) is loaning AZ money baffles me. Money should only be loaned if it is going to be repaid (otherwise it is not a loan). Does anyone see the actions being taken that will allow AZ to generate the cash to repay the loan? From their request for more money, it seems not.

In the back of my mind, I'm wondering what the latest loans are secured against? I don't think there are any owned aircraft left against which loans can be secured, so is the cash secured against LHR slots? LIN slots? property? surely, given the state of the company, banks et al have not loaned money without a preferred charge over some asset.

The strongest EU LCCs (FR, U2, VY) have all announced big expansions in the Italian market for 2014 so the predators are circling. Sadly, as I remember AZ 727s, DC-8s and DC-9s at LHR in the "old days", AZ doesn't seem to have much longer left.



Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,BA11,BU31,B190, B461,B462,B463,(..50 types..),VC10,WESX
User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 74, posted (7 months 4 weeks 15 hours ago) and read 6064 times:

Quoting LAXintl (Reply 67):
now asking for banks to further extend a €200mil loan from October for an additional €50mil to help counter liquidity crunch.
Quoting art (Reply 68):
why the need for 50 million more?

AZ has already burnt the cash from the recent capital increase on debt arrears with suppliers such as ENI (fuel).

Last autumn, ENI threatened to stop fuel delivery if it did not get the guarantee that the overdue bills would be paid for. ENI accepted to wait until an agreement on the capital increase could be reached. After the cash call, the overdue bills had to be reimbursed. In october, AZ owed up to € 50 mi to ENI and we can assume the amount increased over the weeks. And of course other (italian) suppliers were also patiently waiting, such as the FCO authority.

The € 500 Mi package (€ 300 Mi in cash injection from the shareholders/investors + € 200 Mi in bank loans) was aimed at financing the turnaround plan (including the acquisition of new long-haul aircraft) that the CEO G. Del Torchio presented last summer.

Obviously this package was just a survival kit. There will not be no purchase of aircraft due to the lack of cash. There will be no job cuts either in order to preserve the "social peace". Clearly AZ does not have a strategy for its future. I would call it the Cinderella syndrome : Alitalia lives with the dream that a white knight will come and will take her - the beautiful princess she never ceased to be - to a glorious land where in fact mirages abound.



Quoting Homobohemicus (Reply 70):
Would that be an indication that they are not sure or not optimistic of EY making a decision

It is quite a possibility indeed.



Quoting PanHAM (Reply 71):
The only way someone would even consider to invest would be a clean sheet Company, without debt, without Union contracts.

This was what AFKL offered. But it was turned down as you know. The banks do not want to write-off the debt. Trouble is : these banks are also the main shareholders.



Quoting IndianicWorld (Reply 72):
Just why EY would even bother with AZ baffles me.

It is always a question of opportunity. It all depends on the price you pay and the RoI you can get.
Italy has potential, I am not surprised it is of interest for a long-term investor like EY.

In fact, the issue with AZ is purely financial : it is its debt. The cost base is lower than the other European legacies.



Quoting GCT64 (Reply 73):
Why anyone (although those closely associated with the Italian Government might well not operate logically) is loaning AZ money baffles me

But who is loaning the money ? Two Italian banks that happen to be the top shareholders.
Alitalia is virtually in bankruptcy and it is already in the hands of its lenders.



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, 25196 posts, RR: 48
Reply 75, posted (7 months 4 weeks 10 hours ago) and read 5802 times:

Quoting Azure (Reply 74):
In fact, the issue with AZ is purely financial : it is its debt. The cost base is lower than the other European legacies.

Its not debt. Its ongoing operating losses.

Remember in 2008-2009, AZ got a fresh start a part of its reorganization with €625 million in debt being wiped clean as part of the €1 bil+ CAI reorganization plan.

However the carrier continues to incur ongoing operating loses.

This means either 1) Cost are too high, or 2) Revenue's are too low.

In the mean time the debt bubble is here again.

So regardless of the debt, the underlying airline operations is not a viable one as even with massive write-downs of debt it cannot hold its head above water. It seems even an AZ with zero debt service cost would lose money these days.



From the desert to the sea, to all of Southern California
User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 76, posted (7 months 4 weeks 9 hours ago) and read 5713 times:

Quoting LAXintl (Reply 75):
LAXintl my point is that in the prospect of a takeover, the debt is the main issue. All the rest can be worked on by a larger operator, costs and revenue synergies can be found. This is what AFKL wanted to do (by cutting the loss-making routes and merging the back-office), and this is what EY is interested in as well I assume.

But improving the operational result of AZ is one thing, being responsible for its over € 1 Billion debt that was created in just 5 years as you rightfully noted is another one.

In short, the current debt service nullifies any chance of a return to profitability.

You can trim and cut everything you see fit but as long as the debt has to be supported, AZ will remain in the red.

[Edited 2014-01-06 08:59:14]


I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1396 posts, RR: 2
Reply 77, posted (7 months 4 weeks 8 hours ago) and read 6038 times:

I think that while Italy offer large home market but with inherit already more lower yield focus of Italian travel plus massive LCC invasion pressure now, I think any legacy operation like AZ will find it a blood bath.

AZ was given clean life when CAI took over, but it still accumulate large debts.

At best I see AZ used as a feeder operation to someone larger - and AFKL seem much more logical than EY to me.


User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 78, posted (7 months 3 weeks 6 days 12 hours ago) and read 5664 times:

Quoting mercure1 (Reply 77):
AFKL seem much more logical than EY to me.

AFKL had a real industrial project for AZ, whose future, brand, and identity would have been guaranteed within an AFKLAZ group. AZ would have lost its regional, p2p ops, but kept its feeder and long-haul flights. AZ FFP would have been integrated in Flying Blue, FCO would have been properly re-hubbed to complement AMS and CDG.

AZ would have become part of a major European airline group with a clear long-term strategy and numerous partnerships.

Cost and revenue synergies were easy to find (not necessarily easy to implement though).
AZ Back-office would have been transferred to the group's headquarters in Paris resulting in job cuts, but that would have ended up in a more efficient structure with more secure jobs for all the others.

The main condition for this plan was the write-off of the debt, which the Italian government and the Italian banks refused.


On the other hand, for the time being, we know very little about EY's plan on AZ. We can assume that EY is willing to secure the ops to AUH and beyond, we can speculate it may use FCO as a scissor hub for the Americas, but what about the other long-haul flights to Asia or Africa ? How will AZ interconnect with the new Etihad Regional ?

And most importantly, how will DL react ?
AZ is part of the AFKL/DL joint-venture over the Atlantic and I am not sure DL would be happy to welcome aboard this cash-machine one of the ME3s or one of its subsidiaries.



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, 25196 posts, RR: 48
Reply 79, posted (7 months 3 weeks 8 hours ago) and read 5041 times:

Etihad CEO says no rush on AZ decision. No announcement is imminent.

http://www.reuters.com/article/2014/...had-alitalia-idUSBREA0C0K920140113

=



From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 25196 posts, RR: 48
Reply 80, posted (7 months 1 week 5 days 1 hour ago) and read 4483 times:

Alitalia now says it can whip itself in shape with any job losses...  

While the company still needs €128 million in labor cost savings it will seek to instead place people on contracts where workers could be sent home "temporarily" as part of state sponsored social security scheme. Original plans called for as many as 1,900 redundancies.

Alitalia Says It Can Avoid Job Cuts
http://news.airwise.com/story/view/1390431240.html

=



From the desert to the sea, to all of Southern California
User currently offlinebennett123 From United Kingdom, joined Aug 2004, 7572 posts, RR: 3
Reply 81, posted (7 months 1 week 5 days 1 hour ago) and read 4444 times:

Is this "State sponsored Social Security Scheme" another form of state aid.

Also these "Solidarity Contracts" sound like Part Time working.

I am not convinced that this will avoid the pain for AZ.


User currently offlineTPA0822 From United States of America, joined Dec 2013, 185 posts, RR: 0
Reply 82, posted (7 months 1 week 5 days 1 hour ago) and read 4459 times:
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Quoting bennett123 (Reply 81):
I am not convinced that this will avoid the pain for AZ.

I'll be on a FCO-LHR routing in July, and we're not allowed to book AZ. I wonder how many thousands of people are avoiding the airline because it will either go broke, or suffer massive union action before going broke.


User currently offlineDDR From Switzerland, joined Sep 2013, 155 posts, RR: 1
Reply 83, posted (7 months 1 week 5 days 1 hour ago) and read 4429 times:

Quoting PanHAM (Reply 71):
Which means in plain language : bankruptcy, the Name Alitalia and the Designator AZ could not be used by the new firm, new logo etc. in short

I agree with this premise. They also need to cut back on long haul flying and have the remaining long haul all center on Milan. They could create a shuttle type service to Rome for the tourists. It is clear that the business center however, is Milan.

Italy does deserve a "national carrier" and it just seems that Alitalia will never be able to cut costs enough or centralize on Milan to do this.

It is such a shame to see another carrier from my childhood go away.



I am a fan of Swiss and Airbus
User currently offlineAlsatian From France, joined May 2005, 422 posts, RR: 0
Reply 84, posted (7 months 4 days 8 hours ago) and read 3884 times:

Another crisis meeting took place today according to Today.it :

In Italian : Alitalia, riunione urgente e segreta al ministero: sul tavolo il fallimento : "Urgent and secret meeting in the ministry : the failure on the table"

Does it mean that Etihad is giving up ?



Ok I am French but I am not on strike
User currently offlinetyler81190 From United States of America, joined Feb 2009, 687 posts, RR: 0
Reply 85, posted (7 months 4 days 5 hours ago) and read 3624 times:

Quoting Alsatian (Reply 84):
Does it mean that Etihad is giving up ?

Maybe it means Etihad looked at the books and decided to stop smoking whatever it was they were smoking, and walked away?


User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1389 posts, RR: 1
Reply 86, posted (7 months 1 day 14 hours ago) and read 3131 times:

According to Reuters today (Sun 2 Feb), Etihad and Alitalia are "in the final phase of a due diligence process that may result in an investment by the Abu Dhabi carrier in the troubled Italian airline, both companies said in a joint statement on Sunday."

They are saying Etihad might buy a 40 percent stake in Alitalia for as much as €300 million. Timeline to a final decision appears to be 30 days.

There is a PR aspect, the Italian PM is in the UAE on a visit, so plenty of opportunity for the skeptics to argue that there is a lot of political window dressing in this (non-committal) statement.



Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,BA11,BU31,B190, B461,B462,B463,(..50 types..),VC10,WESX
User currently offlineHomobohemicus From Czech Republic, joined Mar 2013, 77 posts, RR: 0
Reply 87, posted (7 months 1 day 14 hours ago) and read 3090 times:

I would hate for any airline to go belly up, but Alitalia needs it to be a better company and stop this painful painful and mainly embarrassing theater that puts very bad light on the -Italian- country's business "seriousness". I have been burnt by this airline so many times in the last (quality issues, loss of baggage and money, delays and cancellations etc...) more than I can count.

Still see AY being sane enough to "invest" as a total mystery and NOT worth the pain as there will be no change in terms of political meddling and appeasing the unions.

Quoting GCT64 (Reply 86):

If it happens then they know something we don't but there seems to be so many "might", "Could", "should" in that statement.

As I understand, 300mln EUR couldn't even begin to describe the actual money needed to get AZ in a near-to-normal-operational state. They can burn through this amount faster than the "ink" dries on any signed agreement they commit themselves to.


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 88, posted (7 months 1 day 13 hours ago) and read 3012 times:

In simple words, the EY CEO would, if he goes ahead with the purchase of 40% of AZ, by far exceed the unlimited funds the Abu Dhabi government gave him to develop Etihad.

 



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1396 posts, RR: 2
Reply 89, posted (7 months 1 day 8 hours ago) and read 2747 times:

Now Etihad says its will make a firm decision one way or other over AZ investment in 30-days.

Etihad Sets 30-Day Deadline to Decide on Alitalia Investment
http://www.bloomberg.com/news/2014-0...ide-on-investment-in-alitalia.html


In article it says Italian government wont make any conditions on the deal, but I doubt EY will truly have a free hand.
Afterall what is EY decides to do massive cuts in staff, will Italian government and unions sit idle?


User currently offlineLAXintl From United States of America, joined May 2000, 25196 posts, RR: 48
Reply 90, posted (7 months 1 day 8 hours ago) and read 2681 times:

Somehow I know this drama is still a long way from being resolved.

Even if EY does invest, surely there will be lots of plot twist along the way as nothing works in a straight line fashion with AZ.

And then what happens if EY after 30-days decides to walk away? Then AZ is again left struggling for yet another major recapitalization.



From the desert to the sea, to all of Southern California
User currently offlineAzure From France, joined Dec 2012, 620 posts, RR: 16
Reply 91, posted (7 months 1 day 6 hours ago) and read 2576 times:

I've read Today's Reuters and Bloomberg's Articles. I wanted to learn more and looked for the original PR by Etihad :

Quote:
2 February 2014

ETIHAD AIRWAYS AND ALITALIA

Etihad Airways and Alitalia have entered the final phase of a due diligence process about a possible investment by Etihad Airways in Alitalia, James Hogan, President and Chief Executive of Etihad Airways, and Gabriele Del Torchio, Chief Executive of Alitalia, confirmed today.

During the next 30 days both companies and their advisors will determine how a common strategy can be developed which meets the objectives of both parties.

Any issues that may prevent the establishment of an appropriate business plan will have to be resolved to ensure the plan can be implemented to move Alitalia to sustainable profitability.

- Ends -

for sure It confirms EY's interest in AZ but it also sets a deadline for the talks. What I read is EY is giving AZ 30 days to accept its conditions.

It is also the tone of this article (in French, sorry) : http://airinfo.org/2014/02/02/etihad-lultimatum-lance-a-alitalia/

Quoting LAXintl (Reply 90):
And then what happens if EY after 30-days decides to walk away? Then AZ is again left struggling for yet another major recapitalization.

I am under the impression Alitalia would have a lot of difficulties to find more loans or more capital in case of a new cash call. There are voices within Intesa Sanpaolo (Alitalia main lender) that point out the major risk that Alitalia constitutes now...



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineOOer From United States of America, joined Oct 2005, 1466 posts, RR: 2
Reply 92, posted (7 months 1 day 5 hours ago) and read 2447 times:

If Etihad does indeed buy up 40% of Alitalia will that mean it will probably leave SkyTeam?

User currently offlineAesma From France, joined Nov 2009, 6617 posts, RR: 9
Reply 93, posted (7 months 1 day 2 hours ago) and read 2310 times:

Quoting mercure1 (Reply 89):
In article it says Italian government wont make any conditions on the deal, but I doubt EY will truly have a free hand.
Afterall what is EY decides to do massive cuts in staff, will Italian government and unions sit idle?

Well with 40% they can't control anything, that's precisely why the laws are made that way.



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, 1396 posts, RR: 2
Reply 94, posted (7 months 1 day 1 hour ago) and read 2263 times:

I think issue for EY decision will be two fold;

1) Will AZ / Italian government / unions agree to whatever terms EY deem necessary to proceed with investment.

and

2) Will these parties hold to this commitment in the long run and not back out, or end up sabotaging EY road map. For instance I could see both the government or unions buckle if the perceived unpopular medicine that EY administers becomes to strong.

As with many issues at AZ, the problem has long been no one wants to accept reality, and those that preach reality or come up with frank options are demonized. I hope this does not end up being the case for EY if after they put money in.


User currently offlineLAXintl From United States of America, joined May 2000, 25196 posts, RR: 48
Reply 95, posted (7 months 20 hours ago) and read 2142 times:

Its almost a leap of fate for EY.

While they provide the money, with only 40% ownership they are not fully in charge steering the ship.

Anything could happen with the AZ soap opera  Wow!



From the desert to the sea, to all of Southern California
User currently offlineAirAfreak From United States of America, joined Apr 2012, 713 posts, RR: 0
Reply 96, posted (7 months 20 hours ago) and read 2106 times:
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In addition to selling real estate, could Alitalia not sell a few of it's Heathrow slots to Virgin Atlantic or DELTA? This would strengthen DL/VS presence further on the NY-London Market while injecting cash into Alitalia.


Do you lead an Intercontinental life?
User currently offlineseahawk From Germany, joined May 2005, 1028 posts, RR: 0
Reply 97, posted (7 months 18 hours ago) and read 2016 times:

The actual control of AZ will not be in the hands of EY. Many have tried to make AZ work again from Air One to AF/KLM, but neither was able to win against the Italian state and the Unions. EY only has a chance if they are given a free hand to renew AZ. If they can I think it would be great for passengers.

User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 98, posted (7 months 15 hours ago) and read 1875 times:

Quoting mercure1 (Reply 94):
As with many issues at AZ, the problem has long been no one wants to accept reality, and those that preach reality or come up with frank options are demonized.

As Mercure1 says above, one problem is that no-one wants to accept reality. AZ is a broken business. Its employees can continue to ignore reality but it loses money and cannot continue operating unless money to cover that loss is found. The staff may believe that the management will forever find funding to cover losses or the government will forever find ways to fund the losses so there is no need to accept restructuring but EY is not Italian. EY won't be getting involved in order to pick up the tab for losses into the indefinite future.

I guess the 30 day deadline is a way of saying that enough time has been spent on due diligence and a decision on the EY proposal needs to be made. AZ has 30 days to take it or leave it.

Quoting seahawk (Reply 97):
The actual control of AZ will not be in the hands of EY. Many have tried to make AZ work again from Air One to AF/KLM, but neither was able to win against the Italian state and the Unions. EY only has a chance if they are given a free hand to renew AZ

I agree. Giving EY a free hand is the only way AZ can be turned around. The only way that the staff will accept changes to give AZ a chance of surviving will be when they see the airline is facing shutdown unless they co-operate. I hope they understand that as a minority shareholder EY would be taking a massive risk in funding AZ and that if the management, employees and unions do not look co-operative EY can walk away. EY has no need to invest in AZ.


User currently offlinepar13del From Bahamas, joined Dec 2005, 7152 posts, RR: 8
Reply 99, posted (7 months 14 hours ago) and read 1774 times:

Quoting art (Reply 98):
Giving EY a free hand is the only way AZ can be turned around.

Well, the question is can they give them a free hand legally.
I can see everyone saying they have a free hand, putting it down on paper, getting and spending the funds necessary to keep the carrier afloat, then someone going to the EU court and having the controlling authority declared illegal.


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 100, posted (7 months 14 hours ago) and read 1733 times:

Quoting par13del (Reply 99):
Well, the question is can they give them a free hand legally

Definately NO. EY, given a "free Hand" would be de facto Controlling AZ despite they control only 49,9% of the voting stock .

Now, the Italian government would likely instruct the Italian equivalent of the FAA to look at the other side but the EU and certain carriers would not tolerate that.

Not only that, the unions would not accept decisions of the Management at will and carry on Business as usual. I doubt that they ever would accept reality, not even when AZ goes belly up and a new carrier is created, Swiss style.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7478 posts, RR: 17
Reply 101, posted (7 months 14 hours ago) and read 1710 times:

Quoting AirAfreak (Reply 96):
could Alitalia not sell a few of it's Heathrow slots

They have been doing this over the years.

Back in Summer 2004 AZ operated 180 weekly LHR slots. Over ten years this number had reduced to the 82 weekly LHR slots AZ had last summer, enough for up to five daily rotations.

Of course they could sell more or even all their remaining LHR slots. But they are already in a poor competitive position compared to BA.

Here is a listing of the current (Winter 2013-14) BA rotations between LHR and Italy:


LHR-LIN-LHR: 7 x daily. Total 92 weekly slots. (Two flights do not operate Day 6, one does not operate Day 7)

LHR-FCO-LHR: 6 x daily. Total 82 weekly slots. (One flight does not operate Day 6)

LHR-BLQ-LHR: 3 x daily. Total 42 weekly slots.

LHR-MXP-LHR: 2 x daily. Total 26 weekly slots. (One flight does not operate Day 6)

LHR-PSA-LHR: 1 x daily. Total 14 weekly slots.

LHR-VCE-LHR: 1 x daily. Total 14 weekly slots.


In comparison to the 270 BA weekly LHR slots for the above flights AZ are currently operating less than a quarter that number, namely 65.


User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 102, posted (7 months 14 hours ago) and read 1721 times:

Quoting par13del (Reply 99):
Quoting art (Reply 98):Giving EY a free hand is the only way AZ can be turned around.
Well, the question is can they give them a free hand legally.
I can see everyone saying they have a free hand, putting it down on paper, getting and spending the funds necessary to keep the carrier afloat, then someone going to the EU court and having the controlling authority declared illegal.
Quoting PanHAM (Reply 100):
Quoting par13del (Reply 99):Well, the question is can they give them a free hand legally
Definately NO. EY, given a "free Hand" would be de facto Controlling AZ despite they control only 49,9% of the voting stock .

I take the point that a minority shareholder cannot legally control a company. However if I (as the majority shareholder in a company) go to a bank with a proposition that requires funding and the bank tells me it will only lend money if I, as the majority shareholder, do what the bank deems beneficial to the company with its money, is that illegal? The bank has no shares in the company yet the bank is dictating how the company is to be run in order for the company to receive its funds.

It seems to me that AZ finds itself in a similar position with EY - it has to accept that EY will decide how the company is to be run if it wants EY's funds. By definition EY will not invest in AZ on terms that are unacceptable to EY ie Alitalia will have to agree to running the company the way Etihad wants it to be run if it wants Etihad's capital injection.


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 103, posted (7 months 13 hours ago) and read 1661 times:

Well, the bank is in a much better Position than a shareholder. A shareholder is at full risk to lose his Investment, yet he is bound by rules and regulations which say that he cannot controll the Company unless he has a majority. Which, then again is ruled out by traffic rights rules.

A bank, on the other Hand, does not only tell the Company how to do Business but also takes collateral to secure their loans. This may eventually not be true in the case of AZ but that is another Story, since AZ is political, Kind of a national Institution against which the state provides all the fund that Institution Needs to stay alive.

Most of us here cannot follow the intentions of EY, especially since AZ might have the same Problems with code sharing Air Serbia had. Will be interesting to see what EY will do at the end of the day.

Whatever will happen, there are so many untapped sources of cash in Italy in businesses run by true patriots....  



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 104, posted (7 months 13 hours ago) and read 1619 times:

Quoting PanHAM (Reply 103):
Whatever will happen, there are so many untapped sources of cash in Italy in businesses run by true patriots....

In that case what does it matter if AZ continues just as it is? Forget about awkward foreign investors like EY who want things to change as a condition of investing - AZ can carry on as it is so long as there are patriotic Italian businessmen prepared to give it money to burn.    


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7478 posts, RR: 17
Reply 105, posted (7 months 12 hours ago) and read 1585 times:

Quoting PanHAM (Reply 103):
A shareholder is at full risk to lose his Investment,

Yes, but

Quoting PanHAM (Reply 103):
yet he is bound by rules and regulations which say that he cannot controll the Company unless he has a majority.

I am not at all sure that there is any rule or regulation that prevents any individual or organisation with a substantial minority share holding seeking the agreement of another significant minority shareholder to force through a strategy agreed between these two shareholders.

Currently I understand that AZ has two shareholders. Compagnia Aerea Italiana (CAI) has a 75 per cent holding. AF/KL has a 25 per cent holding. My understanding is that AF/KL have many shareholders, that CAI has a number of shareholders who were said to be " a group of wealthy Berlusconi cronies" in an American diplomatic cable. I believe that EY effectively has a single shareholder.

My understanding is that if the EY investment goes through - correct me if I am wrong - the AF/KL holding will drop to just under 18 per cent, the CAI holding to just more than 42 per cent and the EY holding will be 40 per cent. So all EY has to do is to get disenchanted shareholder AF/KL onside and, together, they will be able to select AZ's board and therefore effectively control the airline unions and the Italian government willing. And if they are not . . .    Alitalia?

To see the reference to "wealthy Berlusconi cronies" read paragraph 9 here:

http://racconta.espresso.repubblica....ase-italia/dettaglio_eng.php?id=58


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 106, posted (7 months 12 hours ago) and read 1545 times:

Quoting VV701 (Reply 105):
My understanding is that if the EY investment goes through - correct me if I am wrong - the AF/KL holding will drop to just under 18 per cent

If EY buys 49,9% of AZ , any other foreign shareholder must drop out, better sell their Shares to EY, while the Italian stateholdings or the cronies must own the other 50,1%

Lufthansa shares for instance are Name Shares with restricted transferability. The ceiling of foeign ownership is 50% minus one share. In the US it is 25% minus one share. When EY bought into B6 recently they could only buy as man Shares LH allowed them to buy. I would have to double chjeck if LH still got their Holdings in B6 but f they do they will likely Keep the Shares.


As to the control, let's face it, AZ is controlled by the unions and by politics, Regardsless who owns the shop. Even the cronies have no power other than sinking their monies into that Company.

Quoting art (Reply 104):
In that case what does it matter if AZ continues just as it is? Forget about awkward foreign investors like EY who want things to change as a condition of investing - AZ can carry on as it is so long as there are patriotic Italian businessmen prepared to give it money to burn


YES ....and if they find some camels with too much Money , the better.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7478 posts, RR: 17
Reply 107, posted (7 months 12 hours ago) and read 1499 times:

Quoting PanHAM (Reply 106):
Lufthansa shares for instance are Name Shares with restricted transferability. The ceiling of foeign ownership is 50% minus one share.

No. The EU is a single market. I think in the case of both LH and AZ you are confusing "foreign" with "non-EU".

If you were to be right IAG, a Spanish registered company, could not own BA.

Similarly Lufthansa Group could not own LX, OS or (as it did at one time) BD.

Clearly CAI is an Italian (and therefore EU) company owned 100 per cent by Italians. Air France KLM is a French company with an EU majority ownership. Provided CAI and Air France KLM continue to own the majority of AZ shares there is no problem in terms of non-EU ownership of Alitalia. This would be despite Italian owenership being at just over 42 per cent and "foreign" ownership being at just under 58 per cent..


User currently offlineAesma From France, joined Nov 2009, 6617 posts, RR: 9
Reply 108, posted (7 months 11 hours ago) and read 1438 times:

Quoting PanHAM (Reply 103):
Whatever will happen, there are so many untapped sources of cash in Italy in businesses run by true patriots....

Do you mean mafiosis ?



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, 1396 posts, RR: 2
Reply 109, posted (7 months 10 hours ago) and read 1360 times:

Quoting VV701 (Reply 105):
Currently I understand that AZ has two shareholders. Compagnia Aerea Italiana (CAI) has a 75 per cent holding. AF/KL has a 25 per cent holding.

Very old understanding.

Here is current AZ ownership per AZ investor website. AFKL is down to mere 7.08%



Quoting VV701 (Reply 107):
Similarly Lufthansa Group could not own LX, OS or (as it did at one time) BD.

Maybe you don't recall LH had much trouble with traffic rights when they took over LX as LX citizenship was in questions so traffic rights LX had accumulated were in jeopardy. This is because many traffic rights are still based on national basis, and not single EU. So foreign parties for example have agreement with individual European nations not always a single agreement for EU bloc. EU is a single market in eyes of EU, but not always outside parties especially in area of traffic rights.


User currently offlinePanHAM From Germany, joined May 2005, 9337 posts, RR: 29
Reply 110, posted (7 months 9 hours ago) and read 1275 times:

Quoting VV701 (Reply 107):
No. The EU is a single market. I think in the case of both LH and AZ you are confusing "foreign" with "non-EU".

VV701 gave the answer already.

ownership of OS and LX required some complicated structures to Keep the traffic rights for isntance in Russia. The single market is indeed for us Europeans, third countries are not included and that goes both ways.

IAG for instance is a Holding, BA and IB are still operating companies registered in their countries, same for AF and KL



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7478 posts, RR: 17
Reply 111, posted (7 months 8 hours ago) and read 1204 times:

Quoting mercure1 (Reply 109):
Maybe you don't recall LH had much trouble with traffic rights when they took over LX as LX citizenship was in questions so traffic rights LX had accumulated were in jeopardy. This is because many traffic rights are still based on national basis, and not single EU.

It would be invidious to go into such detail in this thread. Just as Lufthansa Group had to play some clever cards to allow BD, LX and OS to continue to operate routes where the authority to operate was vested in bilateral air service agreements between the UK, Switzerland and Austria and other third party, sovereign nations so did AF-KLM and IAG.

In the case of IAG the parent owns 100 per cent of the equity with a 100 per cent interest in the financial affairs of BA, IB and more recently VY. But IAG only owns 49 per cent of the equity in the local (British and Spanish) companies responsible for each airline's operations. This becomes even more complex where important third party countries (including the Russian Federation where over-flying rights are more than important), refuses to recognise the EU as a responsible negotiating body for either the EU itself or the larger European Common Aviation Area.

Note here that according to the last IAG Annual report there are a total of 58 wholly owned IAG subsidiary companies and a further 8 where IAG owns more than half of the equity. (For further details see pages 213-15 of the IAG 2012 Annual Report. They are titled "Group Investments".)

Being a modern, international airline group is an exceedingly complex operation..


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