Alitalia is ready to leave the market for good. However, it will be replaced by the NewCo ITA. Indeed, the EU Commission and Italy have finally agreed to the go-ahead for the soon-to-be new Italian national carrier. Let’s see what the future holds for the NewCo.
The End of a 45-year-old History
Summer 2021 will mark the end of the 45-year-old Italian national carrier. After months of negotiations, the agreement for the go-ahead of ITA between the EU Commissioner for Competition, Margrethe Vestager and the Italian Government, represented by the Ministry for the Economic Development, Giancarlo Giorgetti and the Ministry of Economics and Finance, Daniele Franco, has been reached.
The agreement has its fundamentals in the halving of Alitalia. The aviation branch of the ex-national carrier will be transferred to ITA. However, the NewCo will welcome in its fleet of just 47 aircrafts, of which just 6 are for long-haul routes. But at the end of 2019, Alitalia’s fleet counted 104 jets. The handling and maintenance branches, with their 4,000 employees, have to be sold as soon as possible. Furthermore, the notorious Alitalia brand, which is worth € 150 million, will be put up for auction.
ITA will be allowed to take part in the public tenders of the brand, handling, and maintenance; the NewCo has been granted the possibility of owning a majority share in the handling branch, but not in the maintenance one. Furthermore, ITA has been denied the right to hold the Alitalia loyalty program, MilleMiglia.
Bad News for Alitalia’s Employees.
When ITA begins its operations, it is expected to hire approximately 3,500 ex-Alitalia employees. This means 7,500 other workers will be laid off. Not only will these many employees be laid off, but contracts for those who will remain with the NewCo will change. According to some sources, ITA employees will receive half the money Alitalia is paying them.
What about Alitalia tickets?
With ITA permanently replacing Alitalia starting next September, those tickets sold by Alitalia for flights in September or onward will lose their validity.
The EU Commission is extremely firm on this point; if tickets were considered valid, ITA wouldn’t meet the discontinuity with the ex Italian national carrier requested by the EU Commission. For those who have already bought tickets for September or onward, Alitalia will have to refund them. The Italian government will have to cover the refunds with an ad hoc fund, given that Alitalia does not have enough liquidity to cover the costs.
What do you think of the EU requests for the NewCo ITA? Let us know in the comments below.