Alitalia will have control assumed by the government

Seriously affected by the coronavirus and with no purchase proposals, the Italian government would have decided to save the flag carrier

Alitalia is about to be rescued by the Italian government. The country’s flagship airline, which was looking for a buyer after years of losses, had its financial situation exacerbated by the coronavirus pandemic that has practically canceled most of its flights in recent weeks.

With no groups interested in taking it over, the Italian government is expected to announce a plan to take control over the coming days. According to Reuters, a draft decree is being finalized by the current administration and which provides for the injection of funds to keep it operating.

Even before the virus took over Italy and paralyzed almost all activities, Alitalia was already showing too little breath to stay alive. In January, the government had already injected 400 million euros into the company while trying to secure a purchase agreement with private groups.

Alitalia’s managers had set March 18 as a deadline for receiving proposals by the airline as a whole or by just one of its subsidiaries. However, the worsening of the crisis by Covid-19 ruled out any interested parties. Between seeing it go bankrupt or keeping the iconic company, it remained to save it.


Alitalia has been under intervention since 2017 after repeated losses and attempts to recover it, including the entry of partners such as Etihad Airways, from Abu Dhabi. Since then, there have been discussions about how to sell it and several interested parties, including Air France-KLM, Lufthansa and Delta Airlines.

All these negotiations, however, came up against proposals that focused only on the healthy part of the company. The government’s intransigence ended up preventing the negotiations from evolving. The one that came closest to being realized was made by a consortium that brought together Delta Air Lines and Atlantia, a transport concessionaire belonging to the Benetton group.

The defined model, however, kept Alitalia with a large part of its shares in the hands of the Italian government, through the Ministry of Economy and the state-owned railway company Ferrovie dello Stato. Announced in July, the proposal ended in November due to disagreements between potential members.

Etihad was a partner of Alitalia until 2017, when the Italian company went into administration (Alitalia)

Originally founded in 1947, the first Alitalia operated until 2009 when it went bankrupt. A group of investors had launched a consortium called Compagnia Aerea Italiana (CAI) in the previous year with the aim of acquiring parts of Alitalia as well as hiring its employees.

After the proposal was accepted by the Italian government, the new Alitalia started operations with the same visual identity as the old company. Although new, the airline “inherited” the financial problems of its predecessor and continued to post losses.

In 2014, Etihad announced that it was taking 49% of Alitalia’s shares and the following year ended a partnership with Air France-KLM. After closing routes and failing to negotiate with Italian unions, the company filed for bankruptcy in May 2017, a situation that remains today and which, it seems, should end in the most unthinkable way.


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