Italian flag carrier Alitalia has been in a state of suspended animation in the last year. Following nationalization last Spring, the carrier has been flying essential routes only and plotting its relaunch. So what is the latest with Alitalia? What will the new carrier look like?
Good time to relaunch?
The last decade has not been easy for Alitalia, with the carrier struggling to stay out of bankruptcy several times. However, COVID-19 proved to be too difficult for the carrier to overcome alone, with the government opting to renationalize the airline in March and take control of its future.
But this crisis may prove to be an opportunity for Alitalia to relaunch its operations. According to a plan put forward by the airline’s new management, seen by Reuters, it is looking to seize the flexibility currently available in the market, especially when it comes to routes and aircraft choice.
The relaunched airline hopes to drop domestic point-to-point routes and cede control of some of these routes to low-cost carriers. This would mean flights between cities like Sicily and Turin will be dropped since neither are international hubs. The plan of “elimination of all hub bypass routes” would reshape the airline’s network.
By dropping these routes, Alitalia can center around key hubs and international routes exclusively. The airline aims to breakeven by 2023 and move towards profitability soon after, which is only possible if unprofitable routes are replaced by profitable business-heavy and high-traffic ones.
Radical change
Aside from route changes, Alitalia also wants to take this chance to make radical changes at the airline that were once challenging. This includes shrinking the workforce from 11,000 employees to 9,500 and signing new contracts with all employees, likely with lower benefits due to the current crisis. It should be noted that this is a larger workforce than previous plans had proposed.
Plans to reduce Alitalia’s fleet will also be temporary, with management planning to grow the fleet back to 110 aircraft in the coming years. This is possible due to a fall in aircraft prices currently, allowing the carrier to buy or lease planes for much cheaper than before.
What’s next?
Right now, everything remains at a planning stage for the new Alitalia (if that will even be the new name). Any plan will need approval from Italy’s newly seated government and that could take a few months. Moreover, moves like reducing the fleet, dropping regional routes, and axing jobs will all be met with resistance by many, possibly prolonging the relaunch.
However, it is becoming crucial to relaunch the airline soon and get it back to generating revenue. As countries being their vaccination drive, we could see the new Alitalia return to the skies with full force this summer and capture traffic once again.
What do you think about Alitalia’s proposed relaunch plans? Let us know in the comments!
