Lufthansa’s position has not changed: it wants to invest in Alitalia.
Last week I wrote about the latest plan in Italy to re-nationalize Alitalia. Fulfilling a campaign promise, the recently-elected government is essentially saying Alitalia is as part of Italy as espresso and pizza and will therefore always be with us.
Even more interesting is the government’s stated wish to build an airline of “Italo character”. The implication is clear: Air Italy, which Qatar Airways holds a 49% ownership stake in, is not Italian enough. The new Italian plans hopes that by attracting a minority investor, Alitalia can become “a competitive national carrier”. That’s Italy’s Minister for Labour and Industry Giuseppe di Maio:
We wrote it clearly in the government contract and now we are following exactly that road: Neither rescue, nor survival, but a re-launch within a strategic transport plan that makes Alitalia a competitive national carrier.
Stop laughing for just one moment…Lufthansa still wants in.
Lufthansa: No Problem With Government Plan
Asked about the latest government plan, a Lufthansa spokesman stated:
We can imagine further talks on this basis. We have always emphasized that the Italian market is very important for us and that we are interested in a restructured Alitalia.
And why not? If Lufthansa can rely on the Italian government to bailout the carrier while it reaps the reward of feeding traffic to its longhaul network, I’d be interested as well. There is that small matter of EU law…look for a follow-up post on that. Lufthansa’s takeover plan remains unchanged from last fall.
> Read More: Lufthansa Wants to Make Rome Fiumicino a Hub
But Lufthansa must enter further negotiations with eyes wide open. The Italian airline market is not for the faint of heart.
> Read More: Italian Government Wants to Fight Air Italy By Nationalizing Alitalia (Again)
> Read More: Air Italy: Qatar’s Plan to Destroy Alitalia
image: Felix Gottwald / Wikimedia Commons
You are exactly right in my humble opinion. My impression has always been that the LH team are good business people, which is why they would be interested in an investment that will ultimately be 100% backed by the Italian Government, who will never – ever let Alitalia fail, regardless of the economics. Nor will they ever really take on the unions.
Only if we get new uniforms… : ]
Somehow I don’t see Lufthansa going ahead with this unless they have a majority shareholding and no interference from the Italian government.
To look at the two relatively big carriers they took over, Swiss which had already restructured to a point when Swissair failed and what was left was basically Crossair which took the Swiss name and many of the staff on much reduced terms and conditions. Swiss is now pretty successful with a reputation for quality and good service delivery. It’s just a pity they have such awful business class seats.
Austrian was in its original incarnation when Lufthansa came along and while they tried to negotiate the terms and conditions down they got no where and in the end shut down main line Austrian and now use the Tyrolean licence to operate. Anyone who transferred to Tyrolean did so on much reduced terms and conditions.
They have also set up German/Eurowings, effectively a low cost carrier which does have a couple of additions to the norm like their ‘biz’ class which is OK in European business class terms but poor by any other standard. Then there’s Brussels Airlines, a confused offering if ever there was one with high fares and low cost service.
Lufthansa main line staff still enjoy way above average terms and conditions mostly because German employment law offers protections almost unknown elsewhere and the unions are strong. Lufthansa staff are certainly on a much better deal than their colleages at Swiss and Austrian who deliver almost the same service if not better.
So to Alitalia. The unions are strong and they have kept Alitalia on its knees for years refusing to give on anything and they have the tacit support of the Italian government. Etihad tried to enact change and failed on these grounds and even the costly new uniforms have now gone as the staff apparently didn’t like them.
It’s difficult to see how any third party could succeed with Alitalia when the unions rule and the Italian government now more than ever supports that stance. It is simply a place for a third party to throw their money into a deep pit with no hope of ever seeing it again.
State subsidy is illegal under EU law but the Italians have bailed out Alitalia and persisted with it like no other country in Europe has – Olympic (original incarnations, not Aegean subsidy) failed in Greece, Malev in Hungary but Alitalia keeps going on state aid. I really doubt Lufthansa want it without radical reform which is not a possibility.
It’s Luigi Di Maio. 😉
Giuseppe (Conte) is the PM.