Phosphorus wrote:

LAXintl wrote:

Reports that government has accepted purchase offer by Ferrovie dello Stato.

English isn't my first language, but for some reason, word "anticlimactic" feels like the best description of this development.

Blerg wrote:

Phosphorus wrote:

LAXintl wrote:

Reports that government has accepted purchase offer by Ferrovie dello Stato.

English isn't my first language, but for some reason, word "anticlimactic" feels like the best description of this development.

Anticlimactic? I would rather go with 'expected.'

LAXintl wrote:

Reports that government has accepted purchase offer by Ferrovie dello Stato.

https://www.tpi.it/2018/11/20/alitalia- ... accettato/
https://www.unionesarda.it/articolo/eco ... 99389.html

Seems they desire to secure synergies of an air-rail model, with airline focusing more on longhaul flying and rail picking up more of the domestic operation, while offering increased joint marketing and connectivity.

janders wrote:

AZ purchased back 75% stake in its MilleMiglia loyalty program held by Etihad. Program has 5-million members.

https://www.corriere.it/economia/18_dic ... resh_ce-cp

eta unknown wrote:

Maybe AZ will paint an aircraft "frecciablu"

FatCat wrote:

. With the latest Frecciarossa HSTs you can be connected between the two biggest cities in less than 4 hours, and you'll be in city centre, ... .

vahancrazy wrote:

FatCat wrote:

. With the latest Frecciarossa HSTs you can be connected between the two biggest cities in less than 4 hours, and you'll be in city centre, ... .

You may possibly do it in 4h but the Italian train system is extremely unconsistent. Train delays in Italy are not an hipotesis but a fact. Something minor can frequently cause 1h delay (or more).

Plus, you can use train on the main routes (Milan-Rome and Milan-Venice) but anything South of Rome needs flight connection to the northern part otherway the travel time is over 6h

FatCat wrote:

Distancies in Italy aren't so big to justify an US air transport system, nor so crowded to justify a China air transport system.
Aim is to boost long range - AZ has quite a service on long haul, and is also quite strong in Latin America, for example - and to de-rate the short and very short haul, keeping only FCO as Hub and powering the high speed rail connections to FCO from the rest of Italy.
Busiest national route was - still is, for a certain point of view - Milan - Rome, that's also the busiest high speed rail connection. With the latest Frecciarossa HSTs you can be connected between the two biggest cities in less than 4 hours, and you'll be in city centre, without passing throuh security checks, or waiting for baggage, and - most of all - without having to commute to or from FCO, and for a cheaper price.
Hope this will work - I'd love to see more 77Ws in AZ new livery.

lhrsfosyd wrote:

FatCat wrote:

Distancies in Italy aren't so big to justify an US air transport system, nor so crowded to justify a China air transport system.
Aim is to boost long range - AZ has quite a service on long haul, and is also quite strong in Latin America, for example - and to de-rate the short and very short haul, keeping only FCO as Hub and powering the high speed rail connections to FCO from the rest of Italy.
Busiest national route was - still is, for a certain point of view - Milan - Rome, that's also the busiest high speed rail connection. With the latest Frecciarossa HSTs you can be connected between the two biggest cities in less than 4 hours, and you'll be in city centre, without passing throuh security checks, or waiting for baggage, and - most of all - without having to commute to or from FCO, and for a cheaper price.
Hope this will work - I'd love to see more 77Ws in AZ new livery.

Plenty of Italian domestic routes are operated on a profitable basis by LCC competitors. Alitalia, like Air Berlin, is simply a badly run business.

FatCat wrote:

lhrsfosyd wrote:

FatCat wrote:

Distancies in Italy aren't so big to justify an US air transport system, nor so crowded to justify a China air transport system.
Aim is to boost long range - AZ has quite a service on long haul, and is also quite strong in Latin America, for example - and to de-rate the short and very short haul, keeping only FCO as Hub and powering the high speed rail connections to FCO from the rest of Italy.
Busiest national route was - still is, for a certain point of view - Milan - Rome, that's also the busiest high speed rail connection. With the latest Frecciarossa HSTs you can be connected between the two biggest cities in less than 4 hours, and you'll be in city centre, without passing throuh security checks, or waiting for baggage, and - most of all - without having to commute to or from FCO, and for a cheaper price.
Hope this will work - I'd love to see more 77Ws in AZ new livery.

Plenty of Italian domestic routes are operated on a profitable basis by LCC competitors. Alitalia, like Air Berlin, is simply a badly run business.

I don't agree on the "plenty".
there are some domestic routes that are operated on a profitable basis by LCCs.
FR asks money for serving some routes (there was a huge scandal in 2017 or 2018 between FR and CRV airport, since the Municipality paid € 400000,- + / year to FR to keep the planes serving CRV) as an example
tourist routes are mainly to VCE, VRN, CTA, PMO, NAP and by the way FCO and CIA. OLB maybe but they're still waiting for the big tourist growth expected 10 years ago.
routes out of PSA are profitable for FR and MXP is profitable for Easyjet but everytime I depart from PSA with FR I can see 98% occupancy on international flights, 70% on domestic...

juliuswong wrote:

They have two ex Primera Air A321-200neo coming soon.... Looks like they are not going down anytime soon. Lol

janders wrote:

Delta May Be Frontrunner in Talks for Alitalia Deal
https://www.bloomberg.com/news/articles ... tampa-says

Seems its down to LH or DL as partners with the state railroad.

cityshuttle wrote:

janders wrote:

Delta May Be Frontrunner in Talks for Alitalia Deal
https://www.bloomberg.com/news/articles ... tampa-says

Seems its down to LH or DL as partners with the state railroad.

Lufthansa will definitely not continue negotiations as long as state railroad or any other ‚part-government-owned‘ solution is on the table ... plus cutting jobs is a key to LH for getting AZ back to success (if ever).

Unfortunately the Italian government is blind on this eye - they prefer to keep all the AZ jobs with current crazy conditions and privileges rather than looking for a long-term solution that is promising success. Especially since LH had proven in the past that they know how to achieve such turnaround of an airline.

LH had already outlined their future AZ strategy with developing / expanding FCO as AZ hub (keeping the brand) and converting MXP to EW hub ... keeping in mind the IG (QR) competition at MXP.

If DL was to continue the employment with all those crazy conditions and privileges and not cut jobs it will remain a basket case !

Waterbomber wrote:

cityshuttle wrote:

janders wrote:

Delta May Be Frontrunner in Talks for Alitalia Deal
https://www.bloomberg.com/news/articles ... tampa-says

Seems its down to LH or DL as partners with the state railroad.

Lufthansa will definitely not continue negotiations as long as state railroad or any other ‚part-government-owned‘ solution is on the table ... plus cutting jobs is a key to LH for getting AZ back to success (if ever).

Unfortunately the Italian government is blind on this eye - they prefer to keep all the AZ jobs with current crazy conditions and privileges rather than looking for a long-term solution that is promising success. Especially since LH had proven in the past that they know how to achieve such turnaround of an airline.

LH had already outlined their future AZ strategy with developing / expanding FCO as AZ hub (keeping the brand) and converting MXP to EW hub ... keeping in mind the IG (QR) competition at MXP.

If DL was to continue the employment with all those crazy conditions and privileges and not cut jobs it will remain a basket case !

DL is the most profitable airline in the world with a competent management and the biggest rate of profit sharing with its staff. DL knows how to run an airline like a family and this is what AZ needs.
Plus DL's leadership knows how AZ works, the president used to be an AZ top manager.


LH have no track record of turning around their subsidiaries. BD, SN, OS, EW, 4U have all been under LH for a while and never turned around. Only LX turned around but it was already on a steep climb out of the hole when LH bought it out. Imo LH has little to no part in LX's success.
LH already failed once in Italy with LH Italy.
Plus LH has a culture of low pay high expectations for staff.

As I pointed out a month ago, a FS/DL partnership is the best imaginable combination.
On TATL, DL-AZ are already JV partners but this could take it to the next level with additional capacity and new markets being explored together.
For instance, opportunities exist on the India-Europe/US market dominated by the ME3 but also in the Middle East in the ME3's home turf. I think that that is what DL is really interested in.
Other opportunities exist in the Balkans but that's a bit more complicated.
Also, DL can use a strong positioning to kick the ME3 out of Italy, reference to Air Italy and EK's 5th freedom.

centrair wrote:

“DL knows how to run an airline like a family and this is what AZ needs.”
Have you spent time with an Italian family? Tight but if Giovanni screws up, we are so holding a grudge. J/k

If DL can put in a good investment, streamline and optimize service as well as fill in the gaps between service classes, then on top of that make the network on short-haul more integrated with DL as well as it’s AF/KL partners, it could be on the road to a better place. Here is to hope for Alitalia.

Waterbomber wrote:

DL is the most profitable airline in the world with a competent management and the biggest rate of profit sharing with its staff. DL knows how to run an airline like a family and this is what AZ needs.
Plus DL's leadership knows how AZ works, the president used to be an AZ top manager.

Waterbomber wrote:

DL is the most profitable airline in the world with a competent management and the biggest rate of profit sharing with its staff. DL knows how to run an airline like a family and this is what AZ needs.

cityshuttle wrote:

Waterbomber wrote:

DL is the most profitable airline in the world with a competent management and the biggest rate of profit sharing with its staff. DL knows how to run an airline like a family and this is what AZ needs.
Plus DL's leadership knows how AZ works, the president used to be an AZ top manager.

No doubt DL is successful and knows how to run an airline, so does LH ... The problem is that AZ, especially the staff, doesn’t want any changes and definitely won’t accept cutting 25%-30% jobs. So when DL is offering not to cut jobs the situation won’t change and loosing money will continue.

Plus with a maximum stake of 49% (which might be increased through 3rd parties of DL e.g. AF/KL etc) and in any scenario having the government involved by minority stake (through the rail company etc) it will be extremely difficult to do the necessary steps in order to get AZ back to success.

LH had therefore clearly mentioned that either 100% or nothing. If they have full control - which DL as non-EU airline cannot get - they would realize their previously announced strategy.

And yes, LH did successfully turn around LX - as they turned ‚Crossair‘ from a regional airline into a leading flag carrier. SR was dead and had done nothing to LX‘s success itself. Same with OS, although being a much longer process, it is now in much better condition than it was at the time of takeover. I wouldn’t count SN since the 100% ownership has been a little over 1 year so far and it is still in the process of being turned around.

EW and 4U are totally different - they don’t need to be that successful and profitable ... they only exist to keep LCC’s (FR, U2, DY, VY, W6) away from LH turf and nothing more !

Waterbomber wrote:

Most people seem to assume that AZ's problems are costs. AZ staff are definitely not overpaid, the structure is lean, courtesy of previous restructurings.

Waterbomber wrote:

People will pay to get a good service.

Waterbomber wrote:

SN was served to them on a plate but they're not investing in it and about to dismember it into EW.

Blerg wrote:

All markets that have high enough yields are keeping their legacy status, all others are being switched to Eurowings.

cityshuttle wrote:

Waterbomber wrote:

Most people seem to assume that AZ's problems are costs. AZ staff are definitely not overpaid, the structure is lean, courtesy of previous restructurings.

WRONG >> they have a cost problem for decades !

Waterbomber wrote:

People will pay to get a good service.

Definitely not, especially not with bad economy and high unemployment in Italy ... the reason why LCC‘s like FR and U2 are successful in the Italian market. Why pay triple the price on a 2 hour domestic or 3 hour EU flight - just because of a free snack and coke ?

Waterbomber wrote:

SN was served to them on a plate but they're not investing in it and about to dismember it into EW.

Also wrong ! LH had to give a loan to SN as the kept making losses for years and secured this loan with convertible preference shares and got an agreement to take over the rest for a great price.

You seem to have no clue of EU aviation and the competitive environment for flag carriers and rising LCC‘s. Smaller domestic markets like Belgium and Austria are suffering a lot more than stronger markets Germany and Switzerland.

Blerg wrote:

All markets that have high enough yields are keeping their legacy status, all others are being switched to Eurowings.

Exactly - it depends on if a market has high enough yields or not. If yields are low anyway plus having big LCC competition, flag carriers won’t survive in the EU. This fact is known by LH and they created the ‚new EW‘ to not loose those markets entirely to LCC‘s.

And it obviously takes a few years to see positive results, e.g. IB was not turned around by IAG within 2-3 years either.

Copying the DL business model 1:1 to AZ will fail - not because of DL‘s ability to manage an airline but because of AZ‘s inability to accept cuts and the staff to loose insane privileges e.g. MXP based crew has right of additional FCO apartment paid by AZ etc.

They showed their attitude when EY, after sending money to AZ for years and making investments to hard & soft product, presented the next step of their turnaround strategy which included cut of jobs and cut of privileges ... AZ staff preferred the airline to go to bankruptcy.

cityshuttle wrote:

Waterbomber wrote:

Most people seem to assume that AZ's problems are costs. AZ staff are definitely not overpaid, the structure is lean, courtesy of previous restructurings.

WRONG >> they have a cost problem for decades !

VSMUT wrote:

Waterbomber wrote:

DL is the most profitable airline in the world with a competent management and the biggest rate of profit sharing with its staff. DL knows how to run an airline like a family and this is what AZ needs.

There's barely any competition in the US compared to Europe. That isn't a valid argument. They have been helped to that position by external factors (few competitors and a government that didn't care about consolidation of the market) they weren't in control of. Delta doesn't have to compete against Ryanair, EasyJet, Wizz Air and Norwegian, and they weren't even close to feeling full brunt of the ME3.

winginit wrote:

VSMUT wrote:

Waterbomber wrote:

DL is the most profitable airline in the world with a competent management and the biggest rate of profit sharing with its staff. DL knows how to run an airline like a family and this is what AZ needs.

There's barely any competition in the US compared to Europe. That isn't a valid argument. They have been helped to that position by external factors (few competitors and a government that didn't care about consolidation of the market) they weren't in control of. Delta doesn't have to compete against Ryanair, EasyJet, Wizz Air and Norwegian, and they weren't even close to feeling full brunt of the ME3.

Delta has to compete against Spirit, Frontier, and Allegiant. Are they all that different from Ryanair, EasyJet and Wizz Air?

VSMUT wrote:

winginit wrote:

VSMUT wrote:

There's barely any competition in the US compared to Europe. That isn't a valid argument. They have been helped to that position by external factors (few competitors and a government that didn't care about consolidation of the market) they weren't in control of. Delta doesn't have to compete against Ryanair, EasyJet, Wizz Air and Norwegian, and they weren't even close to feeling full brunt of the ME3.

Delta has to compete against Spirit, Frontier, and Allegiant. Are they all that different from Ryanair, EasyJet and Wizz Air?

Yeah, they are. The lack of competition in the US is well documented:

https://www.economist.com/leaders/2017/ ... n-aviation

Spirit, Frontier and Allegiant combined have a fleet of 295 planes. EasyJet alone has 317. Ryanair 441.

Including orders (and assuming no aircraft will be replaced/phased out), those 3 US operators will have a total of 535 planes. For the 4 EU LCCs I listed, that number is almost 1700. Throw in smaller LCCs and those owned by the majors like Air Baltic, Vueling, Transavia, Smartwings, Volotea, Blue Air, Eurowings etc, and we are talking 2350+ planes, in a geographically smaller market where airlines already have to compete with rapidly expanding low-cost coach companies, package tour operators and high-speed railways. Even driving is competitive - I can drive from Denmark to Strasbourg faster than I can get there by plane. And while the US has 6 major airlines on top of the ULCCs, the EU has over 20 "national" airlines all competing against each other.

winginit wrote:

I can certainly appreciate the argument that DL might be less versed in dealing with LCCs and ULCCs that exist on the large scale that they do in the European market, but does the scale really matter all that much? I'm not married to this opinion, but I would think it's more or less binary without regard for scale - either a carrier like DL is experienced in dealing with LCCs and ULCCs to the point where they know how to compete and respond on the network and revenue management fronts or they don't. DL clearly knows how to compete with LCCs and ULCCs - they do so every day - so I'm not sure I buy the argument that simply because they haven't competed with LCCs and ULCCs on the scale that Alitalia must contend with RyanAir and the like that they'd be unable to adapt their strategies to Alitalia in the short haul space.

Additionally, based on what we know about the Delta bid, I'm under the impression that DL would likely only be taking on AZ's long-haul operations. That makes experience in dealing with large-scale LCCs and ULCCs quite a bit less relevant no? It's not even debatable that DL is far more competent in competing in the TATL space when compared to AZ.

VSMUT wrote:

I for one don't think they will ever earn a single € off Alitalia,

danipawa wrote:

and what is the strategy with a sole B77W ??