The embattled Sardinia-based carrier Air Italy has announced it will be going into voluntary liquidation after racking up losses of €330 million in 2019 – a 106 per cent increase on the €160 million loss the airline recorded in its first full year of being rebranded in 2018.
There had been frenzied speculation on much of Monday and Tuesday that Air Italy faced imminent closure, with Italian media reports suggesting that Air Italy’s majority stakeholder had called an emergency meeting to discuss the future of the loss-making business.
On Tuesday afternoon, a spokesperson for Air Italy confirmed that the shareholders meeting had gone ahead and that a decision had been made to place the business into voluntary liquidation “in the face of repeated losses and persistent negative market and sector conditions”.
Air Italy, which until 2017 was a small regional and charter carrier called Meridiana, was part-owned by Qatar Airways following a 2017 deal. The Persian Gulf airline acquired a 49 per cent stake in the business, which was the maximum amount it could invest under European rules.
Following the investment, Meridiana announced a major shakeup, rebranding as Air Italy and changing up its business strategy to focus on long-haul expansion, especially into North America.
“Given the difficult context, the company has seen a gradual deterioration in results, after Meridiana’s partnership and rebranding in Air Italy,” a translated statement from the airline read.
The spokesperson said that in-depth analysis by independent experts “highlighted the lack of concrete prospects for any improvement for the future.” Last year, losses amounted to 70 per cent of the airline’s turnover.
Qatar Airways has defended its role in the situation, saying it had “strongly believed in the company and in its potential” and that it had been “supporting management’s proposed business plan”.
“Qatar Airways has continuously provided all possible support to Air Italy right from the beginning, from releasing aircraft from our fleet and ordering new aircraft for Air Italy, to backing management choices and injecting capital and investment as required and permitted.”
The Doha-based airline said it was willing to offer further support but this had not been possible because not all shareholders were committed to the business.
The stinging criticism of Alisarda, the carrier’s majority shareholder follows claims the company was planning the closure for some time. Nearly 2,000 staffers now face being made redundant.
Operations have been protected until February 25.
