MILAN (Reuters) – The Italian government will take full control of Alitalia [CAITLA.UL] in June, Industry Minister Stefano Patuanelli said on Thursday, adding the airline would have gone bust due to the coronavirus crisis otherwise.
Alitalia has been run by state-appointed administrators since May 2017 and the difficulties caused by the pandemic came on top of deep-rooted financial problems for the business, scuppering an earlier plan to sell it to private investors.
The former national airline was founded shortly after World War Two and has long struggled for profitability. This latest move will put an end to 11 years of difficult private management, which included three failed restructuring attempts.
The International Air Transport Association (IATA) said last week global airline losses from the coronavirus crisis could total $314 billion this year, representing a 55% drop in passenger revenue compared with last year.
Patuanelli said Alitalia’s revenue had shrunk by 87.5% so far this year.
Speaking before a parliamentary committee for transport, the minister said the government would create a new company at the beginning of June that would take 100% of the airline.
“The new Alitalia will start with a fleet of more than 90 aircraft compared with its current 113 airplanes,” Patuanelli said, denying reports the fleet could be cut to 30 planes.
Thanks to the state intervention, Alitalia will be able to compete effectively once the sector recovers, the minister said.
“Until now Alitalia has been a crystal vase among steel vases. The new company will kick off in the same position as other airlines once the sector restarts,” Patuanelli said, adding the state would decide later whether to keep it under government control.
Patuanelli said he would discuss with the transport and economy ministers a possible new international alliance for the airline once an existing code-sharing agreement with U.S. carrier Delta <DAL.N> expires on May 24.
Commenting on the hearing, the Italian union representing pilots and flight assistants said the government needed to give its green light to the use of a temporary layoff scheme to shield Alitalia employees, of which there are 11,600 in total.
Separately, the Italian lobby for airport operators Assaeroporti forecast the number of passengers travelling to and from airports in the country would total 120 million in 2020, down from a previous estimate of 200 million.
Assaeroporti asked for government support for liquidity and investments to help airport operators survive to the crisis.
Alitalia’s hub is the Fiumicino airport in Rome, which is operated by Aeroporti di Roma, part of infrastructure group Atlantia <ATL.MI>.
(Reporting by Francesca Landini; Editing by Mark Potter)
