Initially founded back in 1946 as Alitalia – Linee Aeree Italiane S.p.A, Italy’s flag carrier will cease operations on 14 October. The airline will be replaced on 15 October by Italia Trasporto Aereo, a Newco founded with the objective of taking over from its struggling soon-to-be predecessor and building a more sustainable operation for Italy’s air transportation industry. In preparation for months and following much disagreement from the European Commission mainly with regards to competition concerns, the carrier finally has the green light – and an inaugural date – paving the way for more hopeful times for the Italian aviation industry.
The Ministry of Economy revealed: “The discussion with the European Commission has allowed us to reach a constructive and balanced solution, which guarantees the discontinuity necessary for compliance with European legislation.”
Back in January, AeroNewsX detailed the European Commission’s continuity concerns surrounding ITA and notably the Newco’s name. This wasn’t the first time that Brussels was disastisfied with the ITA plan: back in October last year, the European Commission was pushing for “economic discontinuity” between the two companies.
“The positive outcome of the dialogue with the Commission allows the procedures relating to the capital increase of ITA to be launched and creates the conditions for the signing of the Memorandum of Understanding for the transfer of certain activities from Alitalia to ITA,” the Ministry of Economy continued.
The European green light didn’t come without sacrifices, however. The more significant conditions of the agreement are as follows:
- Alitalia’s Millemiglia loyalty program will not be transferred to ITA and the latter will not be able to participate in the public tender for the program’s sale.
- Of the slots transferred from Alitalia to ITA, the Newco will be forced to return 57% of slots currently owned at Rome’s Fiumicino Airport and 15% owned at Milan’s Linate Airport.
- Select slots at other European airports may also have to be sold, although the details of that are as of yet unclear
- The carrier is to begin with 52 aircraft, comprising 45 short-haul and 7 long-haul.
Aircraft
As mentioned above, ITA is to begin with a total of 52 aircraft of which 45 will be short-haul and 7 long-haul. Alitalia currently has just over 90 planes in service. By 2022, the Newco expects this number to rise to 78 aircraft. Meanwhile, by the end of 2025, the carrier will operate 105 planes. These numbers demonstrate an intense and rapid growth plan.
Funding and state aid
A total of EUR 1.35 billion will be injected into ITA over the course of 2021 to 2023. In 2021, allowing the carrier to participate in the private sale for Alitalia as well as public tenders for the sale of Alitalia’s brand and its handling and maintenance activities, EUR 700 million will be made available.
In 2022, the carrier will receive EUR 400 million and finally in 2023, EUR 250 million will be injected into the new Italian flag carrier, at which point the airline expects to break even.
Staff
The airline’s personnel count will reduce fairly dramatically with regards to its predecessor. “Alitalia workers who could be hired in the new company are 2,800 in 2021 (mostly pilots and flight attendants) and 5,750 in 2022,” the Ministry of Economy explained. This totals 8550, comparing to the current 10,000.
However, should ITA win the public sale’s of Alitalia’s handling activities (2650+) and/or maintenance operations (1100+), the number of staff will of course grow.
Routes
Initially, ITA will operate to a total of 61 routes across 45 destinations. Come 2025, the airline anticipates this number to rise to 89 routes across 74 destinations. Critics believe, considering the highly competitive environment on the Italy-Italy, Italy-Europe and Europe-Italy markets, the Newco should consider expanding its long-haul network to ensure long-term sustainability. A strong short and medium haul network will therefore be essential should the carrier continue its hub-and-spoke business model.
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