Posts Tagged ‘Alitalia’

Air France announced that it has agreed to pay 25% of stake in Italy flag carrier Alitalia for $432 million. CAI, the current owners of Alitalia seem pleased on selection of Air France – KLM over Lufthansa that had bid on the stake too.

From Mizozo.com

Alitalia declared bankruptcy on Aug 29th 2008 and has been subjected
to various suiters like Lufthansa, etc. The future of the airlines was
in grave danger esp. due to it past financial records and current labor
problems. CAI decided to combine Alitalia with Air One and get a
minority foriegn partner for which Lufthansa and Air France showed

Lufthansa’s Bid

from Lufthansa complained that they were not provided the required
information to provide a firm bid despite the fact that they were the
earlier of the suitors for buying the airlines.


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Rail workers had been staging a strike which has reached its 6th day. The strike is in support of higher wages. The strike initially caused delays but brought almost all trains to a halt on Monday (December 15th 2008).

There are separate strikes at the airport too – “Separately, a strike by two unions at Budapest Airport, a
unit of Germany’s Hochtief entered its sixth day on
Monday and was expected to cause delays on most departing
flights, the airport operator said”. (from here)

So, overall the whole transportation system at Budpapest is in “utter chaos“.

Airlines at Budapest and their status –
Malev Airlines
“Hungarian airline Malev said it had scrapped 12
of its flights scheduled for Monday”

“Cancelled a morning flight scheduled for Rome”

Wizz Air
“it considered legal action against Budapest
Airport for the damages it had incurred during the strike,
called on unions on Monday to stop the action”

Advice from Airlines –
It advised passengers to arrive at the airport three hours
before departure.

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The story came out a week back and is still developing. Recently Britain’s National Archives revealed a document that enumerates unexplained UFO sightings from 1986 to 1992.

Details of the Document (from CTV)

The more than 4,500-page online document is the second batch of
testimonies chock-full of shimmering objects, mysterious crop circles
and creatures from another dimension collected by British military and
released this month. It includes first-hand accounts such as:

  • Statements from police officers in West Yorkshire describing sightings of “bright lights in the night sky”
  • Testimony collected from a U.S. Airforce Sabre jet pilot ordered to
    “shoot down a UFO” flying over eastern England during the height of the
    Cold War
  • A letter from a person dubbed “alien-spotter extraordinaire” who reported regular alien visits since 1982

Another of the 19 files released by the British Ministry of Defence
to the National Archives details a near-miss with a possible UFO and
passenger jet carrying 57 people en route from Milan to London’s
Heathrow Airport on April 21, 1991.

Alitalia Pilot’s Story

On Alitalia flight in 1991 from Milan to Heathrow, Captain Achille Zaghetti and his co-pilot saw “a mysterious khaki-coloured, missile-shaped object streaking across the sky above the Kent countryside.” The object was a 10 feet long UFO.


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Greece announced today that it has launched a tender to sell off its state carrier Olympic Airlines (Greek: Ολυμπιακές Αερογραμμές, Olympiakés Aerogrammés – OA). Pantheon Airways and two other
holding companies have been created which in turn would be sold off.

Assets that will be transferred to Pantheon Airways –

  • Right to use the Olympic brand logo
  • Airport slots
  • Aircrafts
  • IT Systems

After the sale, the airline will cease operations.

The plan did trigger series of protests from employee at Olympic Airlines. Last week in protest, the employees blocked the main runway at Athens International airport. Though, around half of the 8100 employees have been promised jobs in public sector.

Does sound like Alitalia all over again?

Some analysts consider the airline size and poor business history not big enough to get interests from European Airlines like Lufthansa and Air-France KLM.

From Forbes

The likeliest solution is
therefore to be a local one, with Greek investors or a small airline
perhaps making an offer. This might resemble the rescue of Italian
state-owned airline Alitalia,
which narrowly avoided liquidation after unions backed a consortium bid
from Italian investors. There is still a chance Air France-KLM and
Lufthansa will take a minority stake in the airline.

Interested in buying? Read the process from Reuters


– The buyer of Pantheon Airways will be selected via a
multi-stage process. Following the expression of interest,
buyers will be given access to a data room and due diligence
with a view to prepare their bids. The aim is to conclude the
tender within three months, by the end of 2008.


– Interested parties must submit an expression of interest
by Oct 31. They will receive summary information describing the
transaction structure and the assets for sale. Short-listed
applicants will be allowed access to a data room and a meeting
with management after a confidentiality agreement.

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After last week of canceling flights and Italian Prime Minister Silvio Berlusconi’s comments, everyone was waiting for the final shutdown. But yesterday, the airline’s largest labor union reversed course and agreed to concessions contained in the rescue plan
proposed by investment group CAI, which now may include Air France KLM.” The Italian media has reported that Air France – KLM is interested in taking 10-25% stake.

From ATWOnline

CGIL dropped its prior opposition to the CAI deal and agreed to
concessions, including more than 3,000 job cuts. Flight attendants and
pilots still had not agreed late yesterday, but labor leaders
representing the groups reportedly were in meetings in Berlusconi’s
office last night and are under pressure from CGIL and other AZ unions
to sign on.

CGIL head Guglielmo Epifani indicated that the
union had convinced CAI to sweeten its offer in terms of worker
benefits, saying at a news conference that the new deal is an
“absolutely positive comprehensive agreement. . .I’m confident that
with the gains we won it will be possible for those who have not yet
subscribed to the accord to reconsider and contribute to the
re-launching of the company.”

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Alitalia confirmed today that –

  • 20-30 flights were canceled from Rome’s Fiumicino Airport (though it was attributed to “technical reasons”)
  • And no, it has not run out of jet fuel (despite earlier stories for the same)

Earlier CAI, the consortium of Italian investors, withdrew their offer to rescue the airline due to opposition for the labor/trade unions.

In my personal opinion, the airline seem to be on its last leg of existence, and seems like it might liquidate soon. It needs a miracle to save it, though I guess the unions might oppose the miracle too.

From BBC Article

The CAI consortium’s takeover offer was backed by three of
Alitalia’s nine unions, but six opposed the plans, due to plans to cut
3,000 jobs.

The Italian government insists that the CAI deal is the only way for Alitalia to avoid liquidation.

“There is no alternative to CAI,” said Labour Minister Maurizio Sacconi.

“We need to return to the negotiating table because there is no-one else in the race.”

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Alitalia (or Linee Aeree Italiane S.p.A), the flag carrier airline of Italy is going thorugh difficult times but this is not new for the airline with the exception that under the EU rules, the government cannot inject cash into the failing airline like they had been doing before.

The airline had been attributing financial woes due to “pilots and crew members and labour problems and government and political interference with the attempts to solve them

Disclaimer: A lot of the facts are from wikipedia article.

Financial Situation in the Past –

  • Since 1946 (established on September 16th 1946) only one year of profit in 1998.
  • Between 1999-2008 – A total loss of 3.7 billion Euros
  • Government help/loan – 1.5 billion euros in 1998, 1.432 billion euros in 2002, 400 million euros loan in 2004 and more in 2005 (4.9 billion investment since 1998)
  • Current Government help/loan – 300 million euros emergency loan to stave the airline’s collapse
  • 2006 onwards – “The government could in 2006 no longer offer support to the failing
    airline since it has been forbidden by the European Union to inject new
    “. Hence lookout for a private entity to take over the airline.
  • Expectations in 2008 – 600 million euro loss (including 400 million euros on increased fuel cost)

Key Recent Events –

  • March 17th 2008 – Italian government approved takeover bid from Air France-KLM
  • April 2nd 2008 – Air France – KLM withdrew the bid after failure of negotiations with the union.
  • August 29th 2008 – The airline filed for bankruptcy protection with restructuring the airline (like Chapter 11)
  • Current fuel situation – The airline recently announced that their fuel stock will run out on September 14th 2008, since due to the current financial situtations no-one seems to be selling them any fuel.
  • Current – CAI (Compagnia Aerea Italiana), the Italian investment group is willing to spend 1 billion euros to “rescue and relaunch the airlines”

Current Scenario (with CAI, Compagnia Aerea Italiana) (from here and here)-


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