Lufthansa’s CEO, Carsten Spohr, has once again rankled Italy’s Ministry of Economic Development with demands to shrink both the number of staff and aircraft at the bankrupt Italian airline, Alitalia. If approved, thousands of jobs could be axed at the loss-making airline before Lufthansa even considers taking it over.
In May 2017, Alitalia suddenly filed for bankruptcy when major stakeholder, Etihad Airways withdrew vital financing and support. Since then, the Italian government has reportedly pumped around €900 million into the airline in order to keep it afloat.
During the intervening time, Alitalia has not only continued flying an uninterrupted schedule but has even expanded its operations. And while Italy has been willing to temporarily provide financial aid for the beloved but dysfunctional flag carrier, it has made it perfectly clear that renationalisation of Alitalia is not an option.
In fact, Italian Industry Minister Carlo Calenda has said he wants to finalise the sale of Alitalia to a private bidder before a crucial national election in March. Seven bidders submitted their interest in Alitalia last October. Front runners are said to include Lufthansa as well as low-cost airline, easyJet and U.S. private equity fund Cerberus.
Europe’s Ryanair was also said to be very interested in putting in a bid for Alitalia but was forced to withdraw its approach following its pilot rostering fiasco.
In the leaked letter, Sphor wrote:
“While recognising the valuable measures that have been undertaken to date… we strongly believe that there remains a considerable amount of work to be achieved before Lufthansa would be in the position to enter comprehensively into the next phase of the process,”
The letter goes on to say that the so-called ‘NewAlitalia’ would need to have less staff and aircraft if Lufthansa were to even consider investing in the airline. Alitalia employees, however, have already rejected a proposed bid to shrink its near 10,000 workforce.
Late last year, reports emerged that Lufthansa had offered €250 million to take on half of Alitalia’s staff and around 100 of the airline’s 123 aircraft. While the Italian government confirmed they had met with Lufthansa, the details of the deal were strenuously denied.
This latest development could well push back the planned sale of Alitalia. Whether workers at Alitalia are willing to accept Lufthansa’s proposal for the sake of their airline remains to be seen.