Category Archives: Alitalia (4th)

Alitalia SAI sells the brand to ITA for 90 million euros

ITA has acquired the Alitalia brand and domain.

Today, the public offer procedure concerning the Alitalia Spa brand and the domain http://www.Alitalia.com has been concluded.

The new Italian flag carrier, ITA Spa, was awarded the Alitalia brand and domain for 90 million euros.

Marco Finelli reporting from Italy.

Goodbye: Alitalia is set to fly its last flight today amid union turmoil

Alitalia, which has been in bankruptcy protection since 2017 and failed to produce a profit since 2008, will operate its last flight today. It will be replaced by ITA starting tomorrow.

A strike by unhappy employees has led to the cancellation of more than 100 flights this week.

Alitalia issued this statement:

For Monday, October 11, some trade unions proclaimed a 24-hour strike of Air Transport. Alitalia was therefore forced to cancel a series of flights, both domestic and international, scheduled for that day.

As a result of the flight cancellations on 11 October due to the 24-hour strikes, the Company was also forced to cancel some connections on 10 and 12 October 2021.

To limit the inconvenience of passengers, Alitalia has activated an extraordinary plan that provides for the use of more capacious aircraft on domestic and international routes, with the aim of rebooking travelers involved in cancellations on the first flights available on the day.

Alitalia invites all travelers who have purchased a ticket to fly on October 11 – and also on the evening of October 10 and in the early morning of October 12 – to check the status of their flight, before going to the airport, on the alitalia.com website, by calling the toll-free number 800.65.00.55 (from Italy) or the number +39.06.65649 (from abroad), or by contacting the travel agency where they purchased the ticket.

Passengers who have purchased an Alitalia ticket to travel on 11 October (and also on the evening of 10 and in the early morning of 12 October), in case of cancellation of their flight, will be able to change their reservation or request a refund of the ticket without any penalty until 14 October 2021. The trip must be completed by October 14, 2021.

And this statement:

We inform you that due to the current union mobilizations and the simultaneous commitment to professional training at the new airline of part of the crew may occur inconveniences in the provision of Alitalia services.

We also advise passengers to present themselves at boarding with only one hand luggage of the size allowed to contain the waiting time for return to their destination and to check the status of the flight on alitalia.com before going to the airport.

We apologize to passengers for any inconvenience caused.

The last flight is scheduled to operate from Cagliari, Sardinia to Rome (Fiumicino).

ITA will not, for now, use the Alitalia name. An auction to sell the name ended with no bids. ITA stated the starting price was too high.

ITA is the not the economic successor to Alitalia as it will not be encumbered with Alitalia’s debt.

There are also a lot of disgruntled Alitalia employees who have not been hired by ITA.

From the Wall Street Journal via MarketWatch:

https://www.marketwatch.com/story/the-popes-airline-alitalia-to-fly-last-flight-11634198592

From CNN:

https://www.msn.com/en-us/travel/news/how-italys-high-speed-trains-killed-alitalia/ar-AAPsq0I?ocid=BingNewsSearch

Alitalia aircraft slide show:

European Commission rules on €900 million State aid granted by Italy to Alitalia and favorably on Italy’s capital injection of €1.35 billion into Italia Trasporto Aereo (ITA)

The European Commission on September 10 has taken two decisions concerning the aviation sector in Italy.

In the first, we have found that two loans that Italy granted to Alitalia in 2017, for a total of 900 million euros, are illegal under State aid rules. Italy must now recover this amount from Alitalia.

In the second decision, the Commission has reached two important conclusions:

  • First, we have found that the new state-owned airline, called Italia Trasporto Aereo – or ITA, is not the economic successor of Alitalia and is therefore not liable to repay the illegal State aid received by Alitalia.
  • Second, the Commission has found that Italy’s capital injections of 1.35 billion euros into ITA are in line with market conditions, and therefore do not amount to State aid.

Both decisions are important to help restore a level playing field in the European aviation sector, while ensuring air connectivity in Italy and protecting consumer rights. This is especially important in an industry that has been hard hit by the coronavirus pandemic.

The negative decision on Alitalia

Let me now go through the details, starting with the decision concerning Alitalia.

Alitalia’s financial difficulties go back a long time. There have already been a number of attempts to restructure the airline. Since 2008, when a group of private investors purchased a controlling stake, the company has made losses every year.

In 2017, Alitalia was in urgent need of liquidity. However, it had lost access to credit markets due to its financial situation. So Italy gave two state loans to the company worth 900 million euros. At the same time, Alitalia was placed into special bankruptcy proceedings.

In 2018, the Commission opened a formal State aid investigation, following a notification from Italy of the two loans as rescue aid for Alitalia. We also received a number of complaints from other airlines concerned about the impact on fair competition.

Alitalia’s financial position remained unsustainable, and at the end of 2019 the company was again in urgent need of cash. This is when Italy granted the airline another loan worth 400 million euros. Also in this case, the Commission received a number of complaints and opened a second formal investigation in early 2020. This investigation is ongoing, and we expect to be able to adopt a final decision soon.

With respect to the 900 million euros loans, the in-depth investigation has shown that first, the loans amount to State aid for Alitalia, and second that they are illegal under State aid rules.

First, we found that, when Italy granted these loans, it did not act as a private investor. It did not make a prior assessment of how likely it would be that the loans would be repaid by Alitalia, with interest. Our assessment of Alitalia’s financial situation in early 2017 showed that repayment was very unlikely – and, as a matter of fact, the loans have not been repaid to this day. Since no private lender would have granted the loans to Alitalia at the time, they amount to State aid in favor of the company.

Second, the loans could not be approved as rescue aid in line with State aid rules for companies in difficulty. That’s because the loans were not reimbursed within six months, and there was no restructuring plan to return the company to viability nor a liquidation of the company.

Our conclusion is therefore that the two loans gave Alitalia an unfair advantage over its competitors on national, European and world routes. Hence, they constitute illegal State aid, and must now be recovered by Italy from Alitalia.

Economic discontinuity between Alitalia and ITA

I now turn to the second decision we have adopted today.

In 2020, Italy established a new air carrier ITA. ITA plans to take over parts of Alitalia’s business.

Under our rules, a new company is not liable for past aid received by the seller, if the two companies are sufficiently different from one another. In other words, if there is a clear break between them, so-called “economic discontinuity”.

Our second decision concludes that there is economic discontinuity between ITA and Alitalia. This means that ITA will not be liable for the 900 million euros that Alitalia has to repay following today’s decision.

In line with established case law, this is based on a global assessment looking at a number of different factors:

First, looking at the aviation assets transferred, ITA will take off with a significantly reduced perimeter of activities. It will operate less than half of Alitalia’s aircraft, fly to fewer destinations and drop a number of loss making routes.

ITA will also only use a limited number of Alitalia’s take-off and landing slots that corresponds to the number of aircraft that it will operate. The other slots previously used by Alitalia, including at congested airports in Rome and Milan, will be released.

Second, ITA will not take over significant parts of Alitalia’s non-aviation businesses: Alitalia’s ground handling and maintenance businesses will be sold in open and competitive tenders. In these tenders, ITA will only have the opportunity to bid for the ground handling business in Rome Fiumicino Airport, and for a minority stake in the maintenance business.

Third, Alitalia’s brand will also be sold in an open and competitive tender to the highest bidder.

Fourth, ITA will have a more sustainable cost structure, especially in terms of labor and fleet costs. It will hire a significantly reduced number of staff from the market, including from Alitalia, but under new labour contracts, based on market conditions. It will also gradually modernize its fleet with new-generation fuel-efficient aircraft.

Finally, in order to be sure that there is no direct transfer of customers from Alitalia to ITA, ITA will not bid for Alitalia’s loyalty program.

ITA will therefore be a different company from Alitalia. It will take off as a streamlined airline. This is crucial for the long-term viability of ITA.

The launch of ITA

As part of the second decision adopted today, we have also assessed capital injections worth 1.35 billion euros that Italy intends to grant to ITA. These will be injected over the next three years, with an initial 700 million euros this year.

State aid rules are neutral on public versus private interventions. That’s why the State can invest in companies, on terms that a private operator would also have accepted, without it being State aid.

Our assessment of ITA’s business plan has shown that Italy is investing in ITA in line with market conditions. This is also confirmed by three independent expert reports submitted by Italy.

And this is a crucial difference compared to the two loans in favour of Alitalia, on which we have adopted a negative decision today.

The business plan foresees that ITA will be a viable airline, with sustainable costs and staffing, flying to a limited number of destinations with a focus on the profitable routes. Moreover, the business plan assumes future cost reductions stemming from the modernisation of ITA’s fleet, which will result in lower maintenance and fuel costs.

On this basis, the expected returns from Italy’s investment in ITA are estimated to be higher than the cost of equity. We therefore concluded that the Italian intervention in ITA does not constitute State aid under EU rules.

Conclusion

Today marks a fresh start for Italy’s air transport, which had to overcome many challenges. I want to stress one point that was important to us, the interests of passengers: Italy will fully refund Alitalia customers, in case Alitalia fails to honor tickets when it stops flying.

Once ITA takes off, it is for Italy and the management of ITA to make use of this opportunity, once and for all. To establish an airline that is viable, operates on an equal footing with its competitors, lives up to sustainability ambitions, and that will be successful for a long time to come.

The right groundwork has been laid. And we will continue to do our part to ensure fair competition in the European aviation sector.

Thank you.

The rise and fall of Alitalia

Best Seller

From CNN:

“Ciao ciao, Alitalia.
Italy’s storied flag carrier has announced it will no longer issue tickets, triggering a countdown of just a few weeks until its familiar red and green livery vanishes from our skies for good.
The nationally owned airline is to be replaced in October by ITA, a smaller company with a different logo, but the service which once carried Italian pride, style and cuisine — not to mention the Pope — to all corners of the planet will be long gone.”
Read the full story:
Alitalia history highlights (from Alitalia):
1947
The first flight takes off
On May 5, 1947, Alitalia-Aereolinee Italiane Internazionali operated its first flight on the Turin-Rome-Catania route with a Fiat G-12.
In July of the same year, it made its first international flight from Rome to Oslo with a Savoia Marchetti SM95 aircraft with 38 passengers on board.
1950

The first Alitalia flight attendants, dressed in uniforms designed by Sorelle Fontana, made their first flights. The four-engine DC4 entered service. The airline began serving hot meals that made the Company one of the carriers most preferred by international travelers.

1957

Alitalia merged with LAI and became Alitalia – Linee Aeree Italiane with 3000 employees and a fleet of 37 aircraft.
In the international airline company rankings, Alitalia jumped from 20th to 12th place.

1960

Alitalia was the official carrier of the Rome Olympics and for the first time carried more than 1 million passengers in one year. The first jets entered service, the new Leonardo da Vinci airport in Fiumicino was opened and Alitalia transferred its operations base here.

1969-70

Alitalia modified its logo and aircraft livery: the “Winged Arrow” was replaced by the tri-color “A”.
The Boeing 747 jumbo jet entered service and Alitalia became the first European airline company to fly with an “all jet” fleet.

1991-92

It was now possible to fly nonstop for more than 12,000 km with MD11, a new three-engine jet. Giorgio Armani designed new uniforms and he also collaborated in the design of the interiors of the new aircraft.
The MilleMiglia Program was launched.

2001-02

Alitalia Linee Aeree Italiane became part of the SkyTeam Alliance, joining Air France, Delta Air Lines, Korean Air, Aeromexico and CSA Czech Airlines. The modern and efficient twin-engine B777 replaced the glorious B 747s on the long-haul routes.

2009

On 13 January, Alitalia – Compagnia Aerea Italiana operated its first flight. The company took over the goods, infrastructures and personnel from Alitalia – Linee Aeree Italiane and absorbed Air One, creating a single airline, leader in Italy.

Alitalia logo history:
Video:

Top Copyright Photo: Alitalia (1st) (Linee Aeree Italiane) Boeing 747-243B I-DEMU (msn 19732) JFK (Bruce Drum). Image: 102781.

Alitalia aircraft slide show:

 

Alitalia will no longer sell any tickets from October 15, ITA to take over

Alitalia has officially announced the end of operations with this statement:

Alitalia under Extraordinary Administration from midnight August 24, will no longer sell tickets for flights from October 15, 2021.

At the same time, it will send a prompt and direct communication, via e-mail, to customers who have purchased flights departing from October 15. The note includes instructions for managing tickets. In order to ensure full consumer protection, it will be possible to replace the flight with another equivalent operated by Alitalia by October 14; otherwise full refund of the ticket will also be possible.

The communication campaign responds to the Company’s desire to manage the situation in a clear and transparent way, safeguarding consumers.

ITA (the new Alitalia) receives its AOC, will start operations on October 15

ITA – Italia Trasporto Aereo on August 16, 2021 started operating test flights using Airbus A330-202 EI-EJN as the AOC proving aircraft.
The new airline has completed the certification process for obtaining its AOC – Air Operators Certificate and Transport Passengers License.
The new airline will take over the current Alitalia SAI on October 15, 2021.
ITA received “ITY” as the new ICAO code for operations. In the future, ITA will apply for the brand of Alitalia that the commissars intend to sell off with an open competition, as the EU commission dictated for allowing ITA to take off.
ITA cannot buy the current Alitalia frequent flyer program, Millemiglia Loyalty, with 6.1 million members and over 45 billions miles collected from frequent travelers.  The question mark for the future are several:
Network
Rome Fiumicino will be the main focus city for long-haul. Milan Linate will be the main focus city for European flights.
Currently Alitalia is serving only New York JFK and Tokyo Haneda on long-haul.
What will be the routes for ITA?
Fleet
52 jets are the core of start-up fleet, growing to over 80 in the next year with the arrival of new deliveries.
Alliance membership
Currently Alitalia is in the SkyTeam alliance with a code share agreement with Delta Air Lines.
ITA will continue this way and will search for an agreement with Air France – KLM and Virgin Atlantic or switch to Lufthansa, leaving the SkyTeam Alliance and joining the Star Alliance.
This morning the ENAC – Ente Nazionale per l’Aviazione Civile (Italian CAA) issued this statement:
ITA can take off: ENAC issues the air operator certificate and the air transport license to the new national company.
ENAC, the National Civil Aviation Authority, issued today – August 18, 2021, the Air Operator Certificate (AOC) and the Air Transport Operating License to the company ITA (Italy Transport Air).
“ITA can take off – said the President of the National Civil Aviation Authority, State Attorney Pierluigi Di Palma. The hope is that the new national reference company will contribute to the restart of the sector, making a decisive contribution to overcoming the difficulties arising from the pandemic crisis. ENAC will continue in its institutional and technical task to ensure the operational start-up of ITA, ensuring compliance with public interests and the rights of passengers which are essential elements of the air transport business. “
Alessio Quaranta, Director General of ENAC, also points out that “The release of the AOC certifies that the airline has the professional capacity and business organization necessary to ensure the operation of its aircraft in safe conditions. The aircraft operator license constitutes the final provision relating to the legal-administrative and economic-financial, as well as technical-operational checks.
With the possession of the AOC and the aircraft operator license, the company can start the sale of tickets”.
Marco Finelli reporting from Italy.

ITA is doing AOC certification flights with Airbus A330-200 EI-EJN

ITA-Italia Trasporto Aereo, the new Alitalia, has leased Airbus A330-200 EI-EJN from APC Ltd. (Aircraft Purchase Company Ltd.).

The aircraft is being operated on proving flights for the new AOC starting next week.

The airliner is in the Alitalia livery with a ITA sticker.

A second aircraft, an Airbus A320 is due soon.

More from Il Corriere della Sera (in Italian):

https://www.corriere.it/cronache/21_agosto_11/ita-alitalia-ecco-primo-aereo-nuova-compagnia-l-airbus-a330-tintoretto-d32cf658-faa0-11eb-ba5f-da3c10b6af90.shtml

Alitalia Cargo lifts 1 million vaccine doses from Italy to El Salvador

Alitalia Boeing 777 cargo flight landed in San Salvador, El Salvador at 1:55 pm on July 26, 2021 with one million doses of COVID-19 vaccine from China.

Alitalia flight number AZ9460 operated by Boeing 777-243ER EI-DDH. It returned as AZ9461 the following day to Milan Malpensa.

A few weeks ago Alitalia Cargo operated a similar cargo flight from Milan Malpensa to Port of Spain for delivery vaccines to citizens of Trinidad and Tobago.

Marco Finelli reporting from Italy.

Italia Trasporto Aereo (ITA) is born to replace Alitalia

Newly-born Italia Trasporto Aereo (ITA) will replace the loss-making Alitalia. The Treasury of Italy has reached a deal with the European Commission for ITA to replace the current debt-ridden Alitalia on October 15, 2021 with 52 aircraft.

The ITA SpA Board of Directors today under the chairmanship of Alfredo Altavilla, met and approved the guidelines of the 2021-2025 Business Plan.

ITA will be able to acquire the assets necessary to manage the flight division through direct negotiation with Alitalia currently in Extraordinary Administration.

ITA will start with a slot allocation consistent with the initial size of its fleet, maintaining 85% of the slots currently held by Alitalia at Milan Linate Airport and 43% of the slots at Rome Fiumicino International Airport, the latter being less congested than Linate and with a greater availability of slots that can be acquired to support the growth in flights expected over the period of the plan.

The following are the main aspects of the Business Plan approved today:
Fleet
ITA will initially operate with a fleet of 52 aircraft, 7 of which are wide body and 45 narrow body.
In 2022 the fleet will grow to 78 aircraft (+26 on 2021) of which 13 are wide body (+6 on 2021) and 65 narrow body (+20 on 2021).
From 2022, new generation aircraft will begin to be added to the fleet, which will progressively replace older technology aircraft.
At the end of 2025 the fleet will grow to 105 aircraft (23 wide body and 82 narrow body), with 81 new generation aircraft (equal to 77% of the total fleet) which will significantly reduce the environmental impact and optimize the efficiency and quality of the offer.
Employees
ITA will start its operations in 2021 with a range 2,750-2,950 employees which will rise at the end of the plan (2025) to 5,550-5,700 people. All people will be hired with a new employment contract that ensures greater competitiveness and flexibility in comparison with other operators in the sector.
Network
ITA will concentrate on profitable routes from Rome Fiumicino and Milan Linate.
At the start of operations, the company will serve 45 destinations with 61 routes that will rise to 74 destinations and 89 routes in 2025.
In the IATA Winter 2021 season, ITA will operate routes to New York (from Rome and Milan), Tokyo Haneda, Boston and Miami (all three from Rome).
With the IATA Summer 2022 season the company plans to launch new flights to Sao Paulo, Buenos Aires, Washington and Los Angeles.
On the short and medium-haul network, ITA plans to operate connections from Rome Fiumicino and Milan Linate to its main European destinations (including Paris, London, Amsterdam, Brussels, Frankfurt, Geneva, with the expectation of further increasing the number of destinations and frequencies already with the IATA Summer 2022 season).
There are numerous other international routes served from Rome (including, for example, those to Madrid, Athens, Tel Aviv, Cairo, Tunis and Algiers).
Domestically ITA will serve 21 domestic airports.
Previously on July 2, 2021 the European Commission issued this statement:

The European Commission has found that an Italian aid measure of €39.7 million to support Alitalia is in line with EU State aid rules. This measure aims at compensating the airline for the damages suffered on certain routes due to the coronavirus outbreak during the period between 1 March and 30 April 2021.

Alitalia is a major network airline operating in Italy. With a fleet of over 95 planes. In 2019, the company served hundreds of destinations all over the world, carrying about 20 million passengers from its main hub in Rome and other Italian airports to various international destinations.

The restrictions put in place in Italy and other countries to limit the spread of a second and third wave of the coronavirus pandemic have heavily affected Alitalia’s operations. As a result, Alitalia incurred significant operating losses until at least 30 April 2021.

On 25 June 2021, Italy notified to the Commission an additional aid measure to compensate Alitalia for further damages suffered on certain specific routes from 1 March to 30 April 2021 due to the emergency measures necessary to limit the spread of the virus. The support will take the form of a €39.7 million direct grant, which corresponds to the estimated damage directly caused to the airline in that period according to a route-by-route analysis of the eligible routes. This follows the Commission decisions of 12 May 202126 March 202129 December 2020 and 4 September 2020 approving Italian damage compensation measures in favour of Alitalia, compensating the airline for the damages suffered from 1 to 31 January 2021, 1 November to 31 December 2020, 16 June to 31 October 2020 and 1 March to 15 June 2020 respectively.

The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or sectors for damage directly caused by exceptional occurrences. The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having significant economic impact. As a result, exceptional interventions by the Member State to compensate for the damages linked to the outbreak are justified.

The Commission found that the Italian measure will compensate for damages suffered by Alitalia which are directly linked to the coronavirus outbreak that qualifies as exceptional occurrence. The damage is calculated as the loss of profitability on certain routes due to the travel restrictions and other containment measures during the relevant period. It also found that the measure is proportionate, as the route-by-route quantitative analysis submitted by Italy appropriately identifies the damage attributable to the containment measures, and therefore the compensation does not exceed what is necessary to make good the damage on those routes.

On this basis, the Commission concluded that the additional Italian damage compensation measure is in line with EU State aid rules.

Background

Based on complaints received, on 23 April 2018 the Commission opened a formal investigation procedure on €900 million loans granted to Alitalia by Italy in 2017.  On 28 February 2020, the Commission opened a separate formal investigation procedure on an additional €400 million loan granted by Italy in October 2019. Both investigations are ongoing.

Financial support from EU or national funds granted to health services or other public services to tackle the coronavirus situation falls outside the scope of State aid control. The same applies to any public financial support given directly to citizens. Similarly, public support measures that are available to all companies such as for example wage subsidies and suspension of payments of corporate and value added taxes or social contributions do not fall under State aid control and do not require the Commission’s approval under EU State aid rules. In all these cases, Member States can act immediately.

When State aid rules are applicable, Member States can design ample aid measures to support specific companies or sectors suffering from the consequences of the coronavirus outbreak in line with the existing EU State aid framework. On 13 March 2020, the Commission adopted a Communication on a Coordinated economic response to the COVID-19 outbreak setting out these possibilities.

In this respect, for example:

  • Member States can compensate specific companies or specific sectors (in the form of schemes) for the damage suffered due and directly caused by exceptional occurrences, such as those caused by the coronavirus outbreak. This is foreseen by Article 107(2)(b)TFEU.
  • State aid rules based on Article 107(3)(c) TFEU enable Member States to help companies cope with liquidity shortages and needing urgent rescue aid.
  • This can be complemented by a variety of additional measures, such as under the de minimis Regulation and the General Block Exemption Regulation, which can also be put in place by Member States immediately, without involvement of the Commission.

In case of particularly severe economic situations, such as the one currently faced by all Member States due the coronavirus outbreak, EU State aid rules allow Member States to grant support to remedy a serious disturbance to their economy. This is foreseen by Article 107(3)(b) TFEU of the Treaty on the Functioning of the European Union.

Marco Finelli reporting from Italy.

Alitalia flies home the Italian football team from London as the winner of Euro 2020

This morning, Alitalia Airbus A319-112 EI-IMC flew home the Italian football team for the UEFA Euro 2020 championship (played in 2021). Italy defeated England for the championship.

Alitalia flight AZ9001 took off from Luton Airport at 3:02 am and landed at Rome’s Fiumicino Airport at 6:03 am.

Photo: Alitalia. The cup is pictured in the middle seat 1E. Coach Roberto Mancini is in seat 1D, and team manager Gabriele Oriali in seat 1F.

Marco Finelli reporting from Italy.