Alitalia to be re-launched as new company on November 1, 2008

The bankrupt Alitalia SpA, the flag-carrier airline of Italy, will be re-launched as a new company on November 1, 2008.

Italy’s Minister for Industry Claudio Scajola was quoted by the media as telling a news conference in Cernobbio, Italy: “I think the situation is such that the deadline of November 1, 2008, will be respected. We need an airline which can be competitive as soon as possible.” 

Alitalia, headquartered in Rome and with its main hub at Leonardo da Vinci Airport in Rome, is getting a new lease of life following a reorganisation supported by the Italian government. 

The government’s rescue plans for Alitalia aims at increasing revenue, a break-even in two years as well as adding new planes after a group of investors buys its good assets and the unprofitable ones are sold. The profitable assets will go into a new company owned by a group of investors led by Roberto Colaninno, chairman of Piaggio & C. SpA, Industry Minister Claudio Scajola said. 

Marco Tronchetti Provera, chairman of Pirelli & C. SpA, Europe’s third-largest manufacturer of tyres, was quoted by the media as saying that his company may invest between 10 million euros and 20 million euros in the new Alitalia.  

The investors are likely to include between 20 and 25 partners from private industry. A possible foreign partner for Alitalia will not be allowed to own a majority stake. 

The government’s rescue plan for Alitalia, backed by Italy’s Prime Minister Silvio Berlusconi, follows Air France-KLM abandoning its offer to buy the Italian government’s 49.9% stake in Alitalia in April 2008 thanks to opposition from workers union and political parties. 

Augusto Fantozzi, a former finance minister and the state-appointed administrator of the troubled Italian flag carrier, told reporters: “Alitalia will very likely have an international partner by the end of September 2008. I know there is a lot of interest in the new Alitalia by domestic as well as international airlines.” 

Fantozzi, who has been assigned to oversee the rescue efforts of Alitalia, however, cautioned: “We have got a long road ahead, we’re just at the start.” 

The website iht.com reported that the Italian government’s plan to re-launch Alitalia in November 2008 could be overturned by the powerful workers’ unions if they do not reach an agreement on the terms of the plan. Government officials and administrators of Alitalia are holding talks with unions on the plan to save the airline. 

The unions are concerned about job losses, which, according to some reports, may come to 7,000. However, Italy’s Minister for Labour has said the job losses would be only about 3,250. 

The Italian government had declared bankruptcy protection for Alitalia a week ago.  

Details of the industrial plan to revive Alitalia have not yet been made public. Shares of Alitalia have not been publicly traded since earlier 2008 – which means that the company is no longer required to report data. 

According to aviation analysts, the Italian government’s plan involves breaking Alitalia into two parts, with the profitable assets to be taken over, along with Air One – the independent airline based in Rome – by a group of Italian investors ready to invest €1 billion (US $1.5 billion). The other assets, including the cargo and heavy maintenance units, are likely to be liquidated. 

The prospective Italian investors in Alitalia are headed by Roberto Colaninno, chairman of motorcycle and scooter maker Piaggio, who is expected to become chairman, and Rocco Sabelli, a veteran executive, who may become the new Alitalia’s chief executive.