LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 1:48 am

'Complex and serious problems' exact heavy cost on Alitalia
Monday March 26, 2007

A year "marked by increasingly complex and serious problems" ended with a stunning €405.2 million ($541.7 million) pre-tax loss for Alitalia, which nevertheless promised that it possesses sufficient cash to cover operational and financial costs "for a period well in excess of 12 months."

The loss widened from a €144.2 million pre-tax deficit in 2005. It would have been larger had the board followed through on a plan to write down the value of the fleet by €400 million. It said it chose not to, "taking into consideration current events."

AZ blamed a 16% rise in fuel costs, its ability to cut operational costs by "only" €8 million, a 40% increase in low-cost carriers' presence in Italy and €100 million in lost revenue owing to labor difficulties for its troubling performance. Full-year operating revenue dropped 1.6% to €4.72 billion against a 2.9% increase in costs to €4.99 billion. The company said spinning off Alitalia Servizi accounted for most of the revenue drop. Operating loss expanded to €265.7 million from 2005's €47.5 million.


Full article
http://www.atwonline.com/news/story.html?storyID=8342
From the desert to the sea, to all of Southern California
 
OceansWorld
Posts: 828
Joined: Mon Mar 12, 2007 8:00 am

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 2:07 am

On the following PDF document, they say that traffic revenues have been 3,7% higher than 2005, with passengers traffic growing by 1,2%, while cargo transported was up 10,8% compared to the previous year.

Draft report as of 31 December 2006
 
Scorpio
Posts: 4767
Joined: Thu Oct 04, 2001 3:48 am

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 2:17 am

The problems at Alitalia remind me of those of our own ill-fated carrier Sabena. Just how long has it been since Alitalia made any profit? Seems like they've been in trouble for ages.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 4:05 am

Quoting OceansWorld (Reply 1):

Yes, its wonderfull passenger and cargo revenues are up slightly, however does nothing to offset the massive increase in operating cost, pressure from European LCCs and the airlines failure to achieve its cost saving plan during the year.

Quoting Scorpio (Reply 2):
The problems at Alitalia remind me of those of our own ill-fated carrier Sabena

And Olympic of Greece.
From the desert to the sea, to all of Southern California
 
OceansWorld
Posts: 828
Joined: Mon Mar 12, 2007 8:00 am

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 4:33 am

Quoting Laxintl (Reply 3):
Yes, its wonderfull passenger and cargo revenues are up slightly,

Well, I don't know if an increase of almost 11% is just a slight increase, but AFAIK, 2006 was their first full year with five dedicated cargo aircraft. I'm curious to see how that part of their business will evolve.

Quoting Laxintl (Reply 3):
And Olympic of Greece.

They sort of remind the problems of Air France back in the early nineties, when the airline was almost dead, before being turned around to become the airline we now know. Many things like, market share, LCCs and fuel price were quite different then...

[Edited 2007-03-26 21:38:26]
 
rammstein
Posts: 697
Joined: Wed Jul 26, 2006 6:05 pm

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 4:43 am

This monster called Alitalia is bleeding since ages and never dies. I wonder if the current government is going to push again tax-payer money in Alitalia's fauces.

Quoting article:
AZ blamed ... a 40% increase in low-cost carriers' presence in Italy

So what? Should Italian government ban profit-making low-cost carries to save AZ?  Yeah sure
He who wishes to be rich in a day will be hanged in a day. --Leonardo Da Vinci
 
sandrozrh
Posts: 2420
Joined: Sun Feb 04, 2007 12:19 am

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 5:16 am

Quoting Rammstein (Reply 5):
I wonder if the current government is going to push again tax-payer money in Alitalia's fauces.

I thought that that was forbidden as per EU law?

Edit: Spelling

[Edited 2007-03-26 22:18:27]
 
BA787
Posts: 2381
Joined: Sat Jun 03, 2006 9:40 pm

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 5:22 am

To be honest, I think with this new low, share prices in AZ will be incredibly cheap. I see a big takeover looming, from either AF/KLM or, hopefully not, LH.

Either that or I see a massive reduction in ops, akin to Varig(with a takeover too), and huge job losses. Such a shame too, I quite like AZ
 
RJ100
Posts: 3895
Joined: Wed Nov 22, 2000 1:37 am

RE: Alitalia 2006 Loss Increases Significantly

Tue Mar 27, 2007 5:29 am

I also thought it would be forbidden...but you can see how serious the European Union takes it's own laws about forbidden subsidies in the fact that most routes out of Strasbourg are subsidied. It seems when it is about the comfort of politicians, they give a damn about their own laws...  bigthumbsup 

AZ now had many chances but they simply don't get their act together...it's time to let the market play. Other carriers will gladly take up the routes even without billions of tax payers money.
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