Alitalia Airlines After the Merger
With its headquarters in Rome, the capital of Italy, the one-time national airline of Italy, Alitalia, is still the nineteenth largest airline in the world. Alitalia’s hub is Rome’s Leonardo da Vinci-Fiumicino Airport, where it maintains three runways to accommodate its many international flights. The flagship carrier 24 destinations in Italy and 66 more around the world, all of its top 10 flights originating in Rome. Frequent fliers can accumulate points with MileMiglia, qualifying them for free travel on Alitalia or its Sky Team partners, including Air France, Northwest, Delta, Continental (through mid-2009), Aeroflot, Czech Airlines, Korean Airlines, and more.
The very first Alitalia flight took place just a year after the end of World War II, in 1946, originating in Turin and arriving in Rome via Catania. The carrier’s first international flight was in 1947, taking passengers from Milan to South America. Alitalia’s present fleet primarily consists of Boeing and Airbus aircraft, as the company makes strategic changes to expand its international presence after bankruptcy and merger.
Like many other airlines, Alitalia has faced financial challenges almost continuously since its inception, with just one profitable year, 1998. Its most serious financial issues were due to problems with labor issues and government interference. The Italian national government stopped subsidies in 2006, and the airline declared bankruptcy in 2008. The airline then became a private company when Air France-KLM acquired a 25 per cent stake in the airline from the Italian government.
The ?new? Alitalia Airlines merged with Air One, which operates a high-frequency scheduled network to 36 destinations in Italy, Europe and North America. Air One?s main hubs are located in Rome, Milan and Turin. The airlines are partnered under a consortium called Compagnia Aerea Italiana (CAI), which finalized its purchase of the two airlines in December 2008.
Prime Minister Berlusconi had called for the formation of the consortium, which derives its investment capital from wealthy Italian entrepreneurs and banks. The consortium assumed Alitalia’s debts, which led to public questions as to how much the Alitalia sale was subsidized by taxpayers. The new company was formed with a capital of 1 billion euro, and promised a five-year plan to bring the new airline to profitability by 2010. Over 12,000 workers of the “old” Alitalia kept their jobs in the merger, but another 3,250 jobs were eliminated.
The new airline includes a partnership with Air France-KLM, with Air France taking a 25 percent minority stake in Alitalia Airlines. Alitalia officials hope this partnership will help Alitalia reach its goal of profitability as well as expand its presence in the international market. The new partnership and the merger with Air One also means expanded mileage and flight opportunities for the members of the MileMiglia frequent flyer program, as miles can be obtain on all three airlines.
The Pope flies on a chartered Alitalia Airlines jet nicknamed ?Shepherd One.? The changes in Alitalia?s ownership are not expected to impact that arrangement.