Alitalia on the brink as Lufthansa demands restructure

Lufthansa has told the Italian ministry of transport that if Lufthansa is to buy Alitalia then the airline will have to loose more jobs and be substantially restructured before it will make an offer.

9,200 people work at the airline with another 1,600 on temporary government job saving schemes. Any thought of cutting jobs just before Italian elections in April is very difficult for the government. Lufthansa wants it done by March and the deal finalised.

Lufthansa has said it now wants all of the airlines aircraft – the short haul will be absorbed into Eurowings and the long haul kept as the active Alitalia. It’s not interested in Alitalia ground handling services.

EasyJet and and American investment company Cerberus are the other interested parties. Cerberus has a mixed reputation and little airline expertise, easyJet wants the short haul aircraft and routes. RyanAir pulled out after its scandal over pilots, holidays and pay.

Alitalia has only made a small genuine profit 6 times in 70 years of operating. It was considered something of a plum job, and perks and benefits were outlandish. Even cleaners were allowed company paid for taxis to get them to work at one point

The government has ruled out any possible re-nationalisation. The problems in this third bankruptcy were caused when Etihad who’d taken a 49% stake in the airline decided they couldn’t keep putting money in without change. The airline staff voted to decline the offer even knowing it could cause bankruptcy, assuming the government would bail them out as it always has before.

That hasn’t happened and can’t under EU rules for state aid, and unless a buyer is found by April-May the airline will almost certainly be wound up.