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Alitalia Operates its Final Flight But Little Has Changed And The Brand Has Already Been Bought

Alitalia Operates its Final Flight But Little Has Changed And The Brand Has Already Been Bought

The Alitalia Bailout Gets Complicated: Whose Now Interested in Buying Italian Flag Carrier?

Visitors to the Alitalia website on Friday were greeted with a message that the airline had ceased operations after a tumultuous 75-years of being Italy’s flag carrier that had seen the airline rack up huge losses for every single year of its existence.

Customers were presented with information on how to claim their money back for flights that wouldn’t be operating but on the very same day, Alitalia aircraft were flying passengers around Italy, operated by crew who had been working for Alitalia on Thursday.

The state-owned carrier Italia Trasporto Aereo (ITA) officially took over from Alitalia on October 15 as part of a deal that the Italian government struck with the European Union.

Italy has been allowed to create ITA as a new and independent airline to circumvent European competition laws that prevented Alitalia from being bailed out further by the taxpayer.

Alitalia had been placed in extraordinary administration in 2017 after racking up huge losses in the decade before. When major equity partner Etihad Airways pulled its investment, Alitalia fell back into the control of government-appointed administrators.

Attempts were made to sell Alitalia but in the end, Italy decided to cut its losses and start afresh with a new airline called Italy Air Transport (ITA).

ITA will be using ex-Alitalia aircraft and has been told only to hire Alitalia staffers but the new carrier unveiled a special aircraft livery to mark the new start with the words “Born in 2021” in the colours of the Italian flag emblazoned across the side of an aircraft.

It may not be the fresh start, however, that some people have presented it as. ITA has just announced that it has acquired the Alitalia brand for €90 million – far below Alitalia’s initial demands of more than €250 million.

Conditions set by regulators mean a company buying the brand must have the intention of using it. For example, a rival carrier like Ryanair wasn’t permitted to buy the Alitalia brand just to keep it buried.

ITA maintains that it only bought the brand to prevent it from falling into the hands of rivals. On Friday, the airline unveiled a new logo and aircraft livery that would be central to ITA’s brand and differentiate itself from Alitalia.

ITA will start off with just 52 aircraft and nearly 3,000 employees. Alitalia ended its life with a fleet of 110 jets and around 10,000 employees.

In traditional Alitalia fashion, workers staged strikes in the days leading up to the airline’s demise but ITA promises to rehire laid-off staff as soon as market conditions permit. The new carrier has its work cut out – under the terms of the deal with the EU, it must turn a profit by the end of 2025.

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