Alitalia Airlines Still Facing Bankruptcy

This Tuesday marked the deadline for Alitalia, Italy’s flagship airline carrier, to find investors to avoid falling into bankruptcy. The deadline passed without a word, leaving the future of Alitalia up in the air.

Deputy Prime Minister Luigi Di Maio said during a visit to Tunisia on Tuesday, that the Italian government was assessing new offers from potential investors, and that private investors have been making offers in order to rescue Alitalia. In fact, Italy’s state railway, Ferrovie dello Stato, and U.S. carrier, Delta Air Lines, have agreed to contribute to a bid worth nearly 1 billion euros, but this would still leave a shortfall of around 400 million euros.

“Whatever the industrial plan, it will need to be discussed and approved by representatives of those who work for Alitalia … Our aim is a real relaunch, not just a rescue,” said Di Maio.

Despite a 1.4% increase in passenger revenue in the first quarter of 2019, Alitalia was not financially stable enough to be profitable. In the last few months alone, low-cost carrier EasyJet withdrew its interest, while Etihad sold back its stake in the carrier’s frequent flyer program.

This is not the first time in recent years that the airline has faced the prospect of bankruptcy. Alitalia declared bankruptcy in 2008 and, in spite of receiving an investment from Etihad, a prominent Middle East carrier, it again suffered bankruptcy in 2017. The carrier has been under special administration since 2017, after workers rejected the latest in a long line of rescue plans, leaving it to the government in Rome to orchestrate a rescue and avoid massive layoffs.

Employees for Alitalia announced on Wednesday morning, that they would walk off the job for 24 hours in late May after the government’s Apr. 30 deadline passed without a final agreement. The strike is set to take place on Tuesday, May 21, and will include members of all four trade unions representing the airline’s 11,000-member workforce.

According to Reuters, Rome will indefinitely delay the repayment of a 900 million euro state bridging loan to Alitalia, which was to be repaid on June 30.

According to the CAPA Centre for Aviation, Deputy PM Di Maio has stated that there will not be an extension to the Apr. 30 deadline for bids, which would leave Alitalia’s future, and that of its thousands of employees, on uncertain ground.