The bankrupt Italian flag carrier, Alitalia has been in special administration since early last year and attempts to offload the airline onto a private investor have been anything but rapid. Since equity investor Etihad pulled the funding plug on Alitalia in 2017, the Italian government has sunk something in the region of €900+ million on keeping the country’s prized airline flying.
The original idea by Italy’s then autocrat government had been to keep Alitalia operating with the help of a short-term bridge loan before finding a private partner at the earliest possible opportunity. While no one wanted Alitalia to forever disappear, the airline couldn’t just go on being funded by taxpayers forever.
A number of airlines initially approached the special administrators with offers – Germany’s Lufthansa Group was said to be interested, as to were budget airlines easyJet and Wizz Air. But then came a national election and suddenly the sale of Alitalia was put on the backburner.
By the time the dust had settled, things had got even more complicated – Italy now has a nationalist government and Alitalia is a prized possession. There has been talk of the government now taking a 10-15% stake in a restructured Alitalia. Lawmakers have even tapped up other Italian-owned businesses, like the postal service and even Leonardo (a defence services company) to buy into a relaunched Alitalia.
It turns out that Leonardo and the postal service weren’t too interested in that offer but the sell-off is now getting closer and special administrators have revealed new details of the offers they’ve received. So far, Alitalia has received two binding offers and one expression of interest.
Italy’s state railway, Ferrovie dello Stato has confirmed it is behind one of the binding offers, while Atlanta-based Delta Air Lines is said to have submitted the second. Delta has previously been linked with placing an offer for Alitalia and it would fit the airline’s recent strategy of making equity stakes in important foreign markets – such as Virgin Atlantic and the Air France KLM Group.
Meanwhile, easyJet is understood to have submitted the expression of interest – the budget carrier would only be interested in Alitalia’s short-haul operations and only if the sale fitted in with its overall strategy.
Lufthansa has dropped out of the race – the airline’s chief executive raised doubts about Lufthansa’s involvement several months ago and in the last few days said the Group would not get involved in a joint bid with the Italian government.
Clearly, there’s a big decision to make for the special administrators – either to carve up the airline (much like easyJet wants to do) or to attempt to relaunch it in the same form it is today.
There’s still much uncertainty – as it stands, low-cost carriers account for more than half the market share in Italy and Qatar-backed Air Italy is snapping at the heels of Alitalia’s long-haul operations. This could be interesting.