What does a motorscooter and Alitalia have in common?
A CEO it appears. Roberto Colaninno, chairman and CEO of the Piaggio motorcycle company, heads the Italian consortium shepherding the deal and is expected to become chairman of the new Alitalia. Now in the Humpty-Dumpty world of this Italian flag carrier, the reconstruction of Alitalia which just fell off the wall will be fascinating.
Future plans for the carrier would see it divided in half, with its loss-making operations remaining under bankruptcy protection and potentially being liquidated.
Profitable short-haul routes would be separated into a new business, controlled by a consortium of Italian investors including budget airline Air One which would effectively be merged with Alitalia.
Just as with US airlines, Alitalia, courtesy of a new law, will continue functioning during its transition time in bankruptcy. Some of the pieces of the broken airline will jetisoned, some of the pieces will be financed by a group of Italian corporate investors and some of the airline, it appears, will be folded into the Air France/KLM or Lufthansa system.
It appears that the long-haul portion of Alitalia will be the part that Air France/KLM and Lufthansa are bidding on, but some observers feel that Air One, a profitable Italian airline, may want to operate some of the international routes.
The real wild card will be the role of the unions. Anyone who has lived in Italy or worked there, knows the power of the unions. They would rather fall on their sword than negotiate away any pay or benefits. But, now the proverbial s**t has hit the fan and unions have little wiggle room if they hope to emerge from the restructuring with anything.
Alitalia’s nine unions — which scuppered a sale of the carrier to Air France-KLM earlier this year — are up in arms over plans to cut about 7000 jobs, or about 40 percent of its workforce, under the Italian investor-led rescue of the airline.
Augusto Fantozzi, the administrator overseeing Alitalia’s bankruptcy process, told the unions the two sides must reach a deal by next Thursday, a union official at the meeting said.
How the Italian government plans to put Humpty-Dumpty Alitalia together again will be a process of negotiation. The new airline will be a far different looking company than the corporation that entered bankruptcy. However, the government will get stuck with the money-losing part of the airline until they can find a politically acceptable way to dump it.
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The number of job losses has been reduced to 2.350 - these do not include the temporary workers whose contracts will not be confirmed (something that in public employment is a first, I have to say - if you enter public employment with a temporary job, it means you’re there to stay, but not this time apparently) and some jobs in adjointing service companies which will become separate companies but continue to operate (so this part is not a real job loss, imho).
The “bad company”, as the press calls it in Italy, will have the benefit of owning some very relevant real estate included in its assets, which will certainly be sold off very easily and at very high prices; some land around Rome’s airport, which will be sold to Hilton and some other hotel chain for building new hotels, and some other commercialy-valuable buildings and land. Should help in avoiding more taxes for us poor Italian souls who have to shell out for 7 (yes, seven) years of public-funded wages for the former Alitalia empolyees……………..