Alitalia has just secured an additional three billion Euros in funding from the Italian government.
Alitalia gets new cash injection
Reuters is reporting that the Italian government will be injecting a further three billion Euros worth of capital into Alitalia, as there are plans for the airline to be nationalized. This is according to Italy’s Industry Minister, Stefano Patuanelli. This comes after an announcement in mid-March that Alitalia would be getting 600 million Euros in funding.
We’ve known that the plan is to launch a “new” Alitalia in June 2020, though it increasingly looks like the new Alitalia will likely look a lot like the old one, except maybe slightly smaller.
Alitalia furloughing over 6,600 workers
The news of the new cash injection comes as Alitalia has allegedly reached an agreement with unions for 6,622 employees to be furloughed through October 31, 2020.
About half of the employees are in-flight staff (pilots and flight attendants), while the other half are ground based employees. With this arrangement, employees will receive up to 70% of their salaries during the period without working.
This represents roughly half of Alitalia employees, and given the slow anticipated recovery, this seems to make sense.
Alitalia will focus on long-haul & alliances
Italy’s Industry Minister revealed two further points when discussing the “new” Alitalia:
- The airline will focus heavily on long haul routes
- The airline will focus on a new transatlantic alliance
That last point is an especially interesting one. Alitalia was recently kicked out of the SkyTeam transatlantic joint venture — a joint venture between Air France-KLM, Delta, and Alitalia, was swapped for a new joint venture between Air France-KLM, Delta, and Virgin Atlantic.
There has been talk of Alitalia leaving SkyTeam and joining another alliance, though one has to wonder what exactly that might look like:
- Is there room in the oneworld transatlantic joint venture, which currently includes American, British Airways, Finnair, and Iberia?
- Is there room in the Star Alliance transatlantic joint venture, which currently includes Air Canada, Lufthansa Group carriers, and United?
Both scenarios don’t seem particularly likely to me, especially in light of current circumstances, and especially without an equity investment from a participating airline (which seems virtually impossible at this time, given circumstances).
What else could Alitalia be considering that I’m not thinking about?
Bottom line
Alitalia is getting a massive cash injection from the Italian government, and is also furloughing about half of employees through October.
What I’m most intrigued by is Alitalia’s plan for transatlantic partnerships. What exactly could we see them pursue outside of SkyTeam?
What do you make of these developments from Alitalia?
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