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Joined: Wed Aug 11, 1999 3:47 am

Alitalia To Post A Profit

Fri Aug 02, 2002 12:06 am

from www.airwise.com

Aug 1, 2002

Italy's flag-carrying airline, Alitalia, is ready to announce a change in its fortunes when it reports first half earnings next month.

The company's board say that losses of EUR51.4 million for the same period last year have been turned into a pre-tax profit of EUR100 million (USD$97.5 million).

The turnaround is made more dramatic by the fact that the airline lost EUR21.9 million in the first quarter of 2002.

In a statement, the Alitalia board also revealed that they have agreed a deal to sell the carrier's Rome headquarters for EUR152 million.

In another move to dispose of non-core assets, the company is in talks to sell 80 percent of charter operation Eurofly to the Volare group and hopes to complete the deal by the end of next month.

The sales are expected to help Alitalia make a full year profit.

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RE: Alitalia To Post A Profit

Fri Aug 02, 2002 12:39 am

AZ's selling their Rome headquarters?

Some see lines, others see between the lines.
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RE: Alitalia To Post A Profit

Fri Aug 02, 2002 12:52 am

I'd imagine they'd sell the building and lease back the space
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RE: Alitalia To Post A Profit

Fri Aug 02, 2002 1:14 am

The number is little bit a joke. AZ reckons they post an EBITDA (earnings before intrest, taxes, depreciation and amortisation) profit of EUR 100mio Anyone with a little finance knowledge will see that AZ isn't as profitable as they would like to portray. Moreover if both the depreciation and the amortisation were last quarter around EUR 82mio . But then again, if they were really profitable they didn't need any cash from the Italian government.

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RE: Alitalia To Post A Profit

Fri Aug 02, 2002 4:36 am

Agree with you LJ,

EBITDA becomes more and more criticized as an accounting method, and can hide a lot of things.

In FCO, lots of AZ-wide bodies catching dust (747-200 and A300), AZ unable to sell them ?

They are losing more and more territory on their domestic market.

Their network and fleet planning is "terrible", as described to me by an AZ-insider and they are already coping with massive excesses in workforce, but unable to take adequate measures ( union opposition or lay-offs too expensive).

The recent Government Aid (let's call things by their real name) has not exactly increased their popularity, and the small scandal that two "friends" of top-managers were hired during a complete "hiring-stop" could add to the frustration of the Italian taxpayer.

Big questions :
1. Will AF be able to clean up the Italian "casino" ?
2. Will the Government accept losing grip on its "flag-carrier" ?

Exciting years to come......