Is Alitalia going bankrupt?
 

I read on a message board that this airline may not be flying much longer. We just got our tour flight arrangements from Go ahead Tours for July and we are on Alitalia. Should we be worried?

I'd love to hear the answer to this question as I have 4(!) flights booked on alitalia in august.
Thanks for the help

I had this same issue with my early May flights. I searched "Alitalia" on Google every day, and could find lots of up-to-date news.

Also, search "Alitalia" in this forum. There are a couple of somewhat recent threads with some good information about their situation.

(Sorry -- tried to put links, but screwed it up.)

Good luck!

On one hand, Alitalia is indeed in very dire strait. Nobody should be surprised at all if it shuts its door tomorrow.

On the other hand, we've been saying about this for years. Yet, the Italian government has continued to find ways to supply it with money so it's still flying after all this time.

Berlusconi has everything under control. He promised and was elected.

That's a sure thing, no?

The possibility of an Alitalia shutdown has been a topic of discussion for quite some time. These recent threads seemed to indicate a meltdown was imminent.

ALITALIA--What's new?
http://www.fodors.com/forums/threads...p;tid=35129114

Any ideas for Alitalia backup plans?
http://www.fodors.com/forums/threads...p;tid=35122541

Hello PatrickSch, here is today's news regarding Alitalia from Ansa.it (the English version).

http://www.ansa.it/site/notizie/awnp...129190370.html

"Should we be worried?"

Yes, you should. But as others had posted, Alitalia situation has been so far defying gravity.

The italian government managed to inject Eur300m, first as an emergency loan which would be converted to capital. Assuming 3m per day cash burn (would be higher than the prev 1m estimate in the current fuel price), this should allow the company to last at least about 3months. European Commission may complain this is an illegal state aid, but the cash is in Alitalia's account so it would take a while even if the airline is required to repay the fund.

One of main concerns would be labour union strikes (there was a recent speculation that wage payment has been delayed though this was denied by the company). Another, more hard-to-predict issue is how much longer Alitalia's commercial lenders would keep on bankrolling. (SwissAir and Sabena failed when UBS, one of SwissAir's lenders decided to pull the plug).

Thanks everyone. I am trying to focus on the possibility that Alitalia will continue to fly for at least several more months. I am assuming Go Ahead Tours would make other arangements for us if the airline failed since we had no input into the flight choices but I fear nightmare flights if something goes wrong at the last moment.

<I am assuming Go Ahead Tours would make other arrangements for us if the airline it failed>

While that's probably a good assumption, I'd sure check with them on that and confirm they have a back-up plan.

Otherwise, I agree with the above comments. They've been in the death throws for months, but they're still around, even if it does seem to be on life support.

Some added Alitalia financial information.

Their 2007 annual statement recently issued.
2007 net loss was 495 million euro ( 780 Million dollars )

their cash as of April 30, 2008 was 174 millon euro.

Alitalia admits to losing 1 million plus per day. Most now believe this amount is 2-3 million- do the math.
Debt was 1.36 billion euro.
Yesterday the Italian government began its 3rd attempt to find a buyer. One of Italy biggest banks is acting as an advisor.

The 300 million loan by the government , provided some time ago to rescue the airline had to be converted to an asset as the Auditors would not approve the financial statement without this happening - as the financial situation is that much of a problem.
In addition, the Italian government granted this credit in spite of EU regulations that probably prohibit this act- with the loan needing to be returned- Olympic Airlines of Greece has a similar situation.
Highly unlikely that any further money can come from the Italian government.

Add the constant problem of strikes by pilots, ground staff , mechanics etc.
Old planes too the eat jet fuel -

Who would really want this problem ?the noose tightens

Can anyone provide an update on Alitalia's status as of now? I am thinking of booking some short, intra-European flights for late October.The schedules and prices of the Alitalia flights work better for me than those of other airlines, but I don't want to throw my money away and get stranded.

We have a flight booked on Alitalia in mid October (booked as a codeshare for Delta). I'm not too worried because it's technically a Delta flight, although with all of the airline problems, any airline other than Southwest seems like a gamble these days.

"Can anyone provide an update on Alitalia's status as of now?"

Not really: the saga keeps getting dragged out. It can't go on forever, since the EU's said loans to it are illegal and the company's board has to meet in eaely August to determine whether the airline's technically solvent (dead easy: it isn't).

However nothing's ever been that simple in Italy, and Burlusconi's keeps blustering away. In a similar position to you, I decided recently NOT to book Alitalia for late November: apart from the high risk it won't be around, there's the still higher risk its unions will be messing about in protest against whatever compromise might emerge to save something from the mess.

For the sake of an extra hour hanging round an airport, we decided it just wasn't worth the very high likelihood of complete chaos.

slangevar and flanneruk.....Thanks so much for the helpful replies. I think I'll stay away from Alitalia, even if the other airlines' connections aren't as convenient.I'd rather wait around an airport for a reliable connection than deal with flight cancellations, strikes, etc.

marthag - in case this helps at all, we're also taking an intra-European flight in October and have opted to pay a little more for EasyJet over MyAir.com (Italian), Vueling (Spanish) or Air France (French, of course), because the British carriers don't seem as plagued with strikes these days. We came to that decision after MyAir.com posted a strike warning on their site.

(I'm open to being contradicted, but British airlines just seem so much more reliable right now.)

mathag: have you checked whichbudget.com for alternatives to those Alitalia flights?

slangevar:

I'll contradict. "British" airlines (in which I'll include Ryanair, which of course isn't British but Irish) with weak or no unions can retrench without staff causing as much chaos as among legacy airlines.

But BA - and to a lesser extent bmi and Virgin - still have unions who won't buy retrenching lightly. Ryanair, Easyjet, FlyBe and the rest will still retrench, leading to cancelled routes: indeed weak unions make route cancellation easier than it is for Frenmch airlines.

Your key strategy ought to be to trust no-one, and have good cancellation insurance.

I'm trying to fly into Florence, but can't find any budget airlines serving that city. I live in Phoenix, Arizona, and would fly into a major European city, and from there to Florence. At this point I'm probably flying British Airways non-stop to Heathrow, Heathrow to Paris/CDG and from there to Florence on Air France.I'll be too tired to fly to Pisa and then travel by ground from there to Florence.

Any suggestions?

From Chicago we have flown to Zurich(at the time it was $400 less pp) and taken the train down to Italy. You can also get a few days in Lake Como this way. Its a very spectacular train ride thru the Alps.