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Alitalia Brand on Sale, ITA Facing Uphill Road

MIAMI – The Alitalia (AZ) brand is on sale from September 18 with a price tag fixed by the administrators at US$340m (€290m), an amount considered high by the market that had valued it at approximately US170m (€140 to 150m), explain the Italian news outlets Il Sole 24 Ore and Il Corriere. The tender is open up to September 30.

After adorning AZ’s aircraft tails for 52 years, the present logo (Landor & Associates) adopted in 1969 will be in the hands of a future purchaser, which may or may not be the newco ITA as the new carrier is taking some of AZ’s activities. The brand is sold on an open tender basis and, apparently, has more than one pretender.

The conditions to acquire the brand have been defined: individual or legal shareholders enterprises, regardless of nationality and open to non-EU concerns, holding capital of at least US$235m (€200m) and in possession of an Air Transport Licence (ATL) or an Air Operator Certificate (AOC) that limit the access to the tender to already existing air carriers.

According to the Il Sole 24 Ore, which cites sources within the concerned ministry, participation in the tender may also consist of “disturbing actions” meant only to raise the sale price and put more hurdles in front of the newco ITA for which the acquisition of the brand is the only way to a start of business planned for October 15.

The hurdle is major. If ITA’s inability to acquire the brand would result in the impossibility to start operations with the 52 strong fleets, the aviation branch directly obtained and for which ITA made a symbolic offer of US$1.17 (€1), and meant to fly bearing AZ colors and logo. Without the brand, ITA would have to get a fleet under its own brand ready by October 15 which is only 25 days away.

Alitalia Airbus A321-100 EI-IVX – Photo: Milan Witham/Airways

Stumbling Blocks

Nothing is for the moment a sure thing as ITA’s CEO, Alfredo Altavilla, has already announced that the new airline will not be part of a speculative action on the AZ brand, letting so transpire that the newco may also be ready to renounce obtaining the legacy brand.

The list of stumbling blocs does not end here as ITA faces strong opposition from all unions after the announcement that ITA has quit Assaereo, an Italian association regrouping air carriers operating in Italy, and has the intention not to apply the national labor agreement on salaries but an internal ad-hoc rule.

The unions claim this measure would entail a reduction in monthly salaries going from minus 23% to minus 40% when compared to the ones presently applied within AZ. The decreases vary according to calculations methods and/or positions held within the company.

Part of the retribution is based on a 15% productivity prime but ITA’s industrial plan does not expect to produce earnings before 2024 so no earnings, no primes.

Alitalia Boeing 777-300 EI-WLA – Photo: Misael Ocasio Hernandez/Airways

Unions and Staffing Woes

Adding to the union’s turmoil is the fate of the expected 7,700 AZ workers who will be left behind by the newco. Unions are requesting long-term social aid, a burden that will fall on the state and consequently on the taxpayer, already unwilling to continue to support a long-time failing national carrier.

Last but not least, in the list of difficulties being faced by the newborn carrier is personnel. At 25 days from the start of operations, ITA has not yet hired sufficient staff to handle the heavy load of actions required to startup an air transport concern, even considering that long-haul services may not begin before the first quarter of 2022 as clearances from destination countries are yet to be formalized.

To add more difficulties to its uphill road, ITA will be barred from acquiring the MilleMiglia frequent flyer program, to be auctioned with a separate tender, and will have a possible majority stake in the AZ handling branch but only a minority presence within the maintenance sector, which has a potential acquirer in AtiTech, an MRO (Maintenance, Repair, Operations) based in Naples-Capodichino (NAP) Airport.

Stay tuned to Airways for the Alitalia/ITA saga and the future of one of the most recognized global airline brands.

Featured image: Alitalia Airbus A330-200 EI-EJJ – Photo: Alberto Cucini/Airways


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