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mercure1
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Nov 22, 2018 6:43 pm

Bravo. An Italian solution as the government had stated was the desired outcome.
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jsfr
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Nov 22, 2018 7:53 pm

Mega deja-vu.

Inevitable, and hilarious. Alitalia will outlive all of us and never make a cent in profit… The old white male Italian clans will keep passing it from one to another which will at least ensure that Airliner.net gets new threads on a regular basis. Trigger the following threads (organised by year):


2020 - Trenitalia seeks to offload loss-making airline division

2022 - Lombardy government looks for Alitalia buyer

2024 - Pirelli results plumment n Alitalia performance, looking for a buyer

2026 - Sicilian state votes independance and Alitalia privatisation

2028 - ENI decide to focus on core business and look for buyer of loss-making airline

2030 - Venezia can no longer cover airline debts

2032 - Benetton sell Alitalia to state....

Around 2040 they may sell the maintenace division to the Autostrada per l'Italia, in the meantime Berlusconi will have been appointed administrator in charge of PNC recruitment and training....
 
Blerg
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Nov 22, 2018 8:24 pm

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.'
 
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Phosphorus
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Nov 22, 2018 9:05 pm

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.'


make it "default" (pun intended)
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YIMBY
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Re: Alitalia bankruptcy and selling process discussion thread

Fri Nov 23, 2018 6:43 am

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.


Sounds more like permission than acceptance. Lack of details and sources in the articles does not yet convince it being the deal, though I expect just that happen, as far as I can understand Italian politics.

Merging railway and airline companies may cause problems, particularly from the point of view of competition. IMHO local monopolistic and dominant railway / train operator should be neutral for airlines, i.e. if giving interline, points etc, should give equally to all air carriers. Otherwise offering connectivity and replacing short haul flying with trains is just positive development.
 
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SamYeager2016
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Re: Alitalia bankruptcy and selling process discussion thread

Fri Nov 23, 2018 1:12 pm

Given that Brussels and Italy don't exactly see eye to eye at present on a number of issues I wonder how many hoops they will need to jump through to get EU agreement?
 
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mercure1
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Re: Alitalia bankruptcy and selling process discussion thread

Sat Dec 15, 2018 1:09 am

AZ says it seeks to have closer ties with AF/KL and DL.

https://skift.com/2018/12/13/alitalias- ... rance-klm/
mercure f-wtcc
 
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janders
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Re: Alitalia bankruptcy and selling process discussion thread

Wed Dec 19, 2018 8:45 pm

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
"We make war that we may live in peace." -- Aristotle
 
Blerg
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Dec 20, 2018 6:11 am

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


Does anyone know how much they paid for it?
 
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LAXintl
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Re: Alitalia bankruptcy and selling process discussion thread

Fri Dec 21, 2018 12:35 am

Per news story..

The value of the transaction was not disclosed although Etihad acquired its 75% stake from Alitalia in 2015 for EUR112.5 million euro (USD130 million).
From the desert to the sea, to all of Southern California
 
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eta unknown
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Re: Alitalia bankruptcy and selling process discussion thread

Fri Dec 21, 2018 7:14 am

Maybe AZ will paint an aircraft "frecciablu"
 
hinckley
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Re: Alitalia bankruptcy and selling process discussion thread

Fri Dec 21, 2018 10:39 am

eta unknown wrote:
Maybe AZ will paint an aircraft "frecciablu"


No, that won't happen. Nothing ever changes at Alitalia. :smile:
 
FatCat
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Re: Alitalia bankruptcy and selling process discussion thread

Fri Dec 21, 2018 11:21 am

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.
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vahancrazy
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Re: Alitalia bankruptcy and selling process discussion thread

Sat Dec 22, 2018 11:55 am

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
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 11:30 am

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

A delay of 1 hour is not really a delay in Italy. It is routine.
HSTs have dedicated rails - not everywhere, but some - so they do not have slow traffic ahead to wait for. Also in stations they have dedicated platforms and rights to try to stay on-time.
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lhrsfosyd
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 11:36 am

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.
 
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 11:47 am

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...
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Dieuwer
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 12:11 pm

Alitalia: "Plus ça change, plus c'est la même chose"
 
lhrsfosyd
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 12:33 pm

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...


Scandalous FR receives subsidies from the Italian government. Poor Alitalia can never be competitive in such environment!
 
juliuswong
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 2:27 pm

They have two ex Primera Air A321-200neo coming soon.... Looks like they are not going down anytime soon. Lol
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danipawa
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 3:19 pm

and what is the strategy with a sole B77W ??
 
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Re: Alitalia bankruptcy and selling process discussion thread

Thu Jan 03, 2019 4:26 pm

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


Taking deliveries of new aircraft or opening up new routes is no indication of financial stability of an airline.
 
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Re: Alitalia bankruptcy and selling process discussion thread

Sat Jan 05, 2019 6:40 pm

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.
"We make war that we may live in peace." -- Aristotle
 
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 12:51 am

 
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UPlog
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 5:45 pm

Well if Delta does get into bed with AZ, this might be their biggest challenge yet to manage.
 
spannacomo
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 6:16 pm

Delta would not require job cuts, according to Bloomberg. Either that's a joke or delta are simply trying to delude Alitalia in order to prevent a LH takeover.
 
Blerg
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 6:17 pm

I think Delta would be as big of a disaster as LH. Imagine Delta bringing its southern corporate attitude to Italy and expecting to run a company like you do in libertarian Georgia.
 
cityshuttle
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 6:30 pm

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 !
Last edited by cityshuttle on Sun Jan 06, 2019 6:39 pm, edited 2 times in total.
 
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readytotaxi
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 6:37 pm

There is life after death and Alitalia proves it. :duck: The Pope must be happy.
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Waterbomber
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 11:03 pm

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 in Asia and 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 most 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.
Last edited by Waterbomber on Sun Jan 06, 2019 11:14 pm, edited 1 time in total.
 
Blerg
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 11:13 pm

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.


Yes, LH failed in Italy before and they haven't had much success turning around airlines they bought... but DL doesn't have much success either. When have they successfully turned around a failing airline the size of Alitalia? I am not American so I am not too familiar with US aviation landscape but I think DL used to buy out their competition which gave them the upper hand, this would not be the case in Italy.
 
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centrair
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Re: Alitalia bankruptcy and selling process discussion thread

Sun Jan 06, 2019 11:50 pm

“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.
My name is Centrair but HND is closer. Let's Japanese Aviation!
 
Waterbomber
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Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 12:00 am

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.
 
cityshuttle
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Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 9:45 am

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 !
 
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Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 11:27 am

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.


I certainly don't mind if an American company wants to spend its profits in Europe, but come on, most profitable? 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.

On the other hand, I hope a Delta takeover would bring a more US-style economy class to Europe, with PTVs and onboard WiFi with a free basic product and much cheaper packages than any European carrier does.
 
Waterbomber
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Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 11:40 am

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 !


I disagree with most points.
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.
AZ's problem is yields and load factors, ie revenue.
In a low fuel cost environment, any airline with sufficient revenues will be profitable even if the cost base is high.

AZ need to constantly run promo's to attract customers because their base fares are not competitive enough and their product not the really the best.
I get their promotional spam every week but even with promo's they are not competitive.
Their mileage program and customer support is a joke. I'm still waiting on items that I ordered from their redemption program a year ago.

This is why they can't generate revenues.

It's not hard to fix all these things and build a charm offensive to surpass the mediocre competition. People will pay to get a good service.
This is what made DL successful in the US and it will be very easy to apply to AZ and Europe.
I think that the staff at AZ have the will power to succeed and they had figured that mismanaged EY was not investing in their airline and their efforts were in vain. Perhaps their "no" vote was the right path to take.

LX was reducing losses year after year and was already operating for 3 years when LH got on board, so LH had nothing to do with the successful start-over from Crossair. LH took over a profitable airline.
On the other hand, LH destroyed BD, they are about to destroy OS which is being invaded in VIE by everyone and their mother. SN was served to them on a plate but they're not investing in it and about to dismember it into EW. LH Passage is undergoing strike after strike and the situation is worse there than at AZ.
EW is a mess and it's headed for nowhere.
The LH Group is a poorly run, inefficient coloss with a golden hen called LX and shear mass saving the day, because other than that they have nothing to show for the huge conglomerate that they are.

LH has nothing to offer to turn around AZ. Not expertise, not investments, not a strategy.

Leave it to the pro's at DL.
 
Blerg
Posts: 2352
Joined: Tue Jan 09, 2018 11:42 am

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 12:16 pm

As far as LH goes, I wouldn't say they don't have a strategy or expertise, quite the opposite. Their primary strategy is to consolidate the European aviation market around their own LH Group brand. All markets that have high enough yields are keeping their legacy status, all others are being switched to Eurowings. OS could have made VIE work up until competition exploded there. Now that yields have been turned to trash there is no reason for LH to keep OS around. I am sure in the future more and more routes out of VIE will be switched to Eurowings.
Quite simple really. The same scenario would have happened in Italy, Milan was already planned for Eurowings supposedly because of Air Italy. I am certain down the road Rome would get the same treatment.

With current EU politics being the way they are, I don't see LH being allowed anywhere near AZ. DL might be a better option but once again, I don't know how successful they will be.
 
cityshuttle
Posts: 92
Joined: Mon Jan 02, 2017 3:56 pm

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 1:04 pm

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.
 
Waterbomber
Posts: 849
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Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 3:13 pm

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.


First of all, neither the hard nor the soft product had improved under EY. Their B777's look tired in the cabin. The A320's look dated too, with a seatback slot that looks like a PTV is supposed to fit in but there isn't one.
The network had been trimmed back and FCO-LIN has lost out to the railways.
EY dumped hundreds of millions but without any strategy, so those ended up financing the losses and not the growth that was aimed at.

It takes a few years to see positive results? LH was in BD for over a decade before they were forced to buy them over and ended up cutting it up. LH is already in both SN and OS for over a decade without positive results to show for it BECAUSE THEY DON'T INVEST for growth.
Germanwings also exists for a while now but has nothing to show for it.

If DL come to Italy and start running things, LH could see LX and MUC melt away too. Many pax flying long haul through ZRH or MUC can fly just as well from FCO.

DL is keeping AZ staff because they see a growth strategy, unlike EY and LH who can only see reduction strategies.

And about the bad economy in Italy, that only exists in the imagination. Ryanair and Easyjet are not giving away those domestic flights. In fact, very often they are more expensive than their international offerings.
I have been on several domestic flights in Italy in the past year, the last one just two months ago. Packed to the gills and high fares despite flying from BGY.
In Milan, taxi's are driving Prius and Rav4's, and while the city looks poor on the surface, go down to the Duomo shopping area and you realise that there are lots of people who are making more than a living. Most of us can't even afford a tailor-made Italian costume while most Italian businessmen are walking the streets in one. Why else would the EU3 be scrambling for a spot in LIN?

I can see about the same in the South, but there people are really rich. The economy is poor on the surface but you should see the small fortunes that the grandpa's and grandma's are leaving behind.
Property prices at Olbia are rivalling London. Mr. Berlusconi has turned down offers of half a billion Euro's for Villa Certosa.
Italy looks poor on the surface but if you get the chance to walk at Milano Centrale station, instead of looking at the poor looking chaps and beggars gathering there, look around you at the amazing architecture in marble.
Fuel prices are higher in Italy than anywhere in Europe. Utilities are more expensive than anywhere in Europe. Veal and meat in general is more expensive tahn in the rest of Europe. Yet people are getting by. So believe me, there is demand for a premium product to/from Italy, but only if the value justifies the price.
 
spannacomo
Posts: 99
Joined: Wed May 30, 2018 5:38 pm

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 6:15 pm

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 !

I think you both have a point. AZ has an excess of staff as shown by the 1500 people (about 12% of total) now on governement benefits waiting to return to work in AZ or to be sacked, maybe hired by Ferrovie dello Stato. At the same time they have a problem with the low yield market they serve, FCO, which is a touristic location but no business. LIN is also served but since the track is too short for a wide body to land there, that market is also more suitable to a point to point LCC than a legacy, because of the impossibility to become an intercontinental hub.
Basically AZ are nowhere in a position to ever earn money.
 
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SamYeager2016
Posts: 202
Joined: Wed Jun 15, 2016 6:22 pm

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 6:30 pm

Well if Waterbomber's right we're about to see the most miraculous turnaround ever in the history of aviation if DL take over. I would love to see it but frankly I suspect there'll be a lot of schadenfreude when DL is seen to have blown its reputation for prudent management not to mention its profits on Alitalia if it wins. DL can only own 49% of Alitalia and it's Italian & EU rules & regulation that DL will need to comply with.
 
IADFCO
Posts: 129
Joined: Sun May 22, 2016 4:20 pm

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 8:29 pm

I am curious to see how AZ is going to compare with UA on the upcoming IAD-FCO route - certainly the bar couldn't be set any lower :D

Among the Italian expats I know in the Washington, DC, area, Alitalia is legendary for the lack of attention to the customer, especially by the FA, and everybody tries to avoid it. UA is lousy, AF and BA are OK, LH is usually best.

The point here is that you need to have a product a customer wants to buy, and even having the latest neoneoneo or MAXMAXMAX aircraft will not save an airline if flying with them is unpleasant.
 
winginit
Posts: 2555
Joined: Sat Feb 23, 2013 9:23 pm

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 8:35 pm

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
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Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 9:34 pm

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?


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
Posts: 2555
Joined: Sat Feb 23, 2013 9:23 pm

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 10:00 pm

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.


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
Posts: 3020
Joined: Mon Aug 08, 2016 11:40 am

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 11:07 pm

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.


Waterbomber used as argument that Delta was more competent at turning around Alitalia because "they are the most profitable airline in the world". That is what I am disputing, not that Delta lacks the ability to compete with the low cost airlines. It's an apples-to-oranges comparison when US airlines earn 22 dollars for every passenger vs 7 earned by European carriers due to different market conditions.
I for one don't think they will ever earn a single € off Alitalia, but if they want to subsidize a bunch of European jobs for a few years, then be my guest. But of course it could just be a ploy to replace US crewed aircraft on routes to the EU with cheaper European crewed planes operating on behalf of Delta.
 
bennett123
Posts: 8946
Joined: Sun Aug 15, 2004 12:49 am

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 11:22 pm

Personally, I do not see AZ making a comeback with DL and a State partner.

It is unclear how they will boost revenue with the existing staff.

Once anyone talks about cuts in staff then sparks will fly.

Also if DL has only 49% then they lose control and do not see the Government being hands off.
 
winginit
Posts: 2555
Joined: Sat Feb 23, 2013 9:23 pm

Re: Alitalia bankruptcy and selling process discussion thread

Mon Jan 07, 2019 11:50 pm

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


We're in agreement there. While we haven't seen the details of the proposal this seems a rather expensive way for DL to secure further JFK and LHR slots, which is what I think this may well be about at the end of the day.
 
User avatar
ojjunior
Posts: 826
Joined: Thu Jul 13, 2006 12:31 am

Re: Alitalia bankruptcy and selling process discussion thread

Tue Jan 08, 2019 12:44 am

danipawa wrote:
and what is the strategy with a sole B77W ??

To make GRU, EZE and JFK spotters happy.
 
User avatar
usdcaguy
Posts: 1332
Joined: Mon Jan 26, 2004 12:41 pm

Re: Alitalia bankruptcy and selling process discussion thread

Tue Jan 08, 2019 2:23 am

To be honest, I do not see how DL would benefit from an investment in AZ apart from the ability to keep it away from LH. DL already has a fairly good network out of Italy, and although AZ is able to provide some feed from its Italian and Eastern European routes, DL is able to cover most of these markets nonstop on its own metal, particularly in the summer. To be honest, I think DALPA should watch its back. DL could easily start having AZ do more of its Italy flying for them, and DL pilots would sadly lose out.

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