It has certainly been a challenging week for the Italian Government. For those not familiar with the ongoing situation the political crisis began when Matteo Renzi pulled his party, Italia Viva, out of Italian government’s previous coalition, over disagreements about how the government was planning on using the COVID-19 recovery fund. This left the then Prime Minister, Giuseppe Conte without a majority and despite surviving two confidence motions the Prime Minister decided to resign, hoping to form a new coalition which didn’t materialise.
President Sergio Mattarella then called on Mario Draghi, a former Chief of the European Central Bank to lead talks in forming a new government. In an online vote, thousands of members of the populist Five Star Movement voted 59.3% in favour of supporting Mario Draghi and is now officially the new Prime Minister of Italy. However, the political instability within the Italian government has raised concerns about the Italian flag carrier, Alitalia.
A few days ago, the Commissioner of Alitalia, Giuseppe Leogrande stated that Alitalia barely has any money left to pay staff salaries for the month of February and the ongoing government situation is slowing down the carrier’s request for additional funding. The previous Italian government, of Giuseppe Conte, had relied on Commissioner Giuseppe Leogrande to oversee the acquisition of Alitalia by the spin-off company, ITA, which was created in a November decree. ITA’s current business plan calls for the acquisition of about half of Alitalia, with 52 planes and approximately 5,500 employees, but without the coordination of those in government who created the conditions, the situation has stalled.
The European Commission is still not overly convinced about the acquisition and recently asked for the new Italian flag carrier to avoid the name “Alitalia” in an attempt to avoid “continuity.” Meanwhile the Directorate General for Competition for the European Union is calling for a new invitation to tender and is withholding roughly €73 million of the €350 million allocated by the government in funding for the airline.
However, the Commissioner for Alitalia, Leogrande, is reported to have said that making any public tender takes about 5 months, and given that Alitalia consumes about €50 million per month, the Commissioner has confidently stated that there is not enough money to last it for another 5 months. Meanwhile, the Commissioner will now have to engage in talks with the new government to see if they will secure the necessary resources to move forward.
Meanwhile, an Italian-American entrepreneur, Flavio Robert Paltrinieri and his partners have met the workers’ unions, stating that they want to save the current Alitalia, without the staff or the taxpayers paying the consequences through the use of state resources. A new industrial plan with around ten billion euros at its disposal was outlined and stated that the Italian airline would no longer be focusing on the unsustainable competition in the low-cost market. Instead, the industrial plan envisages new competitiveness for Alitalia thanks to a strategy based on long haul and small point-to-point routes, even stating that it plans to have 900 medium to long haul destinations by 2027.
However, the future of Alitalia still remains a key talking point in Italy and a lot of issues still remain such as will the new government in charge provide state support like the previous government or will it rely on foreign capital again? Only time will tell if the right decisions will be made about the future of Italy’s national airline, Alitalia.
