The Vultures Are Circling Alitalia as It Looks for a Savior

The worst airline ever, Alitalia, has had a busy few months. After continuing to bleed money thanks to Etihad’s failed turnaround plan for the airline, Alitalia went bankrupt and the Italians went looking for someone — anyone — to step in to save the day, just as Etihad had done a few short years ago. Though I expressed an interest in buying the airline for a penny if someone else wanted to absorb its debts, I never actually submitted that plan. But now, word is out that . I’m guessing less than half are more legitimate than mine, but they’re being kept confidential for now. I’d bet most of these are a Pan Am-style buffet where airlines want to pick the meat off the bloated carcass and let the rest just sink to the bottom of the ocean, but I suppose there could be a couple of folks interested in something more.

The problem first started back in 1946 when Alitalia was founded. Wait, that’s not right. Though honestly I can’t remember when Alitalia’s problems began. After years of turmoil, Alitalia thought it had found a savior in Etihad back in 2014. Etihad came in with a turnaround plan that involved going upscale and tweaking the network, but it was doomed from the beginning. It became quickly evident that the plan wouldn’t work and profit was not right around the corner. It all fell off the rails last year as Alitalia’s dreams of profit were dashed while others smelled blood in the water.

Low cost carriers saw tremendous opportunity in Italy and ramped up. Ryanair has been particularly active, even choosing Rome as its first connecting hub. Alitalia continued to flail while it prepared for a stand-off with labor. A desperate turnaround plan was put out there, but it required the unions to go along. To just about nobody’s surprise, they shot themselves in the foot and turned it down. Alitalia is operating off a cash infusion for the next few months while the search for a sugar daddy goes on.

As someone who has loved writing about Alitalia since I crowned it the “worst airline ever” in the early days of the blog back in 2006, I find myself pulling for the airline. Why? Well, I just can’t imagine a world without my favorite whipping boy in the skies. Oh sure, there are other candidates for the position as worst airline ever, but none can hold a candle.

I received plenty of notes from people asking whether this was the end, and honestly, I doubt it. The Italians have too much pride in their national carrier to realize that it’s completely and totally unnecessary. If Alitalia were to go away, then other airlines — profitable ones — would swoop in immediately and fill the void.

When it was announced that there were 32 entities interested in saving Alitalia, I know a lot of people were shaking their heads. Why would anyone be interested? Well, we aren’t sure that anyone truly is interested in Alitalia the airline. We do, however, know that airlines are interested in Alitalia’s assets to get a jump on the competition if the airline went away.

This is the Pan Am strategy. United picked off Pan Am’s Pacific network in the ’80s. Just a few years later, it bought the airline’s Heathrow rights. Then Delta bought the rest of the European network while promising to prop up the piddly remains of the airline. That lasted about 5 minutes and Pan Am was gone for good.

Do we know that’s what’s happening with Alitalia? Well, we do to some extent. While the bids are confidential, the bidders are welcome to out themselves. And some have done just that.

but it doesn’t want to buy Alitalia. It just wants to pour airplanes into Italy and then Alitalia’s long haul flights. There’s no way the Italians will go for that, but they should seriously consider it.

Lufthansa is also interested. It has long been an important player in northern Italy with its Air Dolomiti operation that connects Italy with its Munich hub. You might also remember the short-lived Lufthansa Italia operation that flew from Milan to other European cities. That failed, but it shows that Lufthansa is always interested in an Italian opportunity. Of course, Lufthansa doesn’t want a piece of the airline. It just wants its assets – fleet, slots, etc.

Air France, a longtime Alitalia partner that has been distancing itself in recent years, is always rumored to be interested, as is Delta. But it’s likely they have the same interest Lufthansa has.

Is there anyone who would actually want Alitalia to remain, thrive, and grow? Well, Etihad is tapped out, it would seem. So who do airlines turn to when nobody else is willing to play? Hainan parent HNA Group of course. That company has been buying up anything it sees and is quickly replacing Etihad as the leader of the movement to support failing airlines. I have to assume HNA is sniffing around.

The thing is, I will be shocked if the Italians are willing to let Alitalia go. So you might end up with some kind of goofy situation where Alitalia lives on in name only just to placate the leaders of the country while nothing else stays the same. The best thing that could happen to the airline is for it to go away and let healthier airlines step in. But let’s hope that doesn’t happen. I just can’t stand the thought of finding a new worst airline ever.

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