The Italian government is reviewing seven proposals to
bring Alitalia out of bankruptcy. Those potential buyers include Lufthansa and EasyJet.
Still, Alitalia executives insist
the carrier will not accept a
marriage of desperation. New
chief commercial officer Fabio
Maria Lazzerini said Alitalia’s
financial situation has improved since it began bankruptcy proceedings this year.
He spoke with BTN transportation editor Michael B. Baker.
What’s the status of administration?
Potential companies [had] until Nov. 5 to present their offers. The offers will be binding offers for the ones presenting their offers, not for Alitalia. Alitalia management, along
with the commissioners and the government, will evaluate
the offers. The preference will be for the bidders that create
an offer for the entire company, not for small pieces of it.
The government intends to keep the company whole, Italian
and operating out of Italy and keeping the name. We then
will open individual negotiations with potential bidders to
improve those bids.
What’s happening with operations?
The company is launching its new service for the winter season. We are already planning new service for the summer
season. For the first time after three years, revenues are up
compared with the previous year. The first six months of the
year, EBITDA was positive by 46 million euros. Last year was
negative. We are planning to grow EBITDA. It doesn’t mean
we will not generate losses but much lower than the previous years. This is important for the stability of the company,
despite what happens with the process. When the administration started on May 2, the government gave Alitalia a bank
loan of 600 million euros [and in October increased it to 900
million euros] to protect the company and make sure Alitalia
could continue to operate. That has [barely] been touched
yet because Alitalia managed to generate enough cash to
sustain itself. That allows us to have long-term planning.
The [Italian] Civil Aviation Authority gave back to Alitalia
the unlimited license to fly [after] 10 months [with] a temporary one. The commissioners have the power of reducing
costs even further because they can terminate any contract
at their own will. Some costs have been terminated like a
contract on the fuel price, which was way negative for Alitalia. Other contracts represent further opportunity of savings.
We are completely redoing Alitalia.com, making it much
more modern and more integrated not only with the sales
process but the check-in and post-sales processes.
What about with corporate business? Are
you continuing to negotiate and renew
contracts with corporate travel programs
and travel management companies?
Corporates are important. We are talking with the direct
customers and can partner even better with the TMCs. We
are reinforcing the team looking after the global corporate
accounts, both [agency] and companies. A new VP joined
to be responsible for global sales to bring back focus on
this side of the business because it is the most profitable
one. We need to balance [business from Italian compa-
nies], which is 45 percent of the overall revenues of Ali-
talia, with the relationships outside Italy. Italy is a market
where [small and midsize enterprises] are very important.
Something like 95 percent of the Italian companies are be-
low 200 employees; you cannot go for a super-corporate
global agreement, but they’re important. We have a pro-
gram called Alitalia BusinessConnect. It’s basically a pro-
gram where both the company and the flyer accrue miles
they can use.
What is the route growth you mentioned?
We [launched] Male [in the Maldives and] New Delhi at the
end of [October], and we are operating Los Angeles for the
winter season. We are planning further growth next summer, something in Africa. Potentially, we will work with
[Delta through our joint venture] to see if there are other
opportunities to increase frequencies or coverage of North
America. We have integrated [with Delta] and are pushing
to be even more integrated. I’m not saying all the problems
of Alitalia have been solved. It still needs a strong partner,
which can be a financial institution, an investment fund, another legacy carrier, a low-cost carrier, a European carrier.
Alitalia needs to be reinforced because we need to increase
our capacity to operate a long-haul network.
You had your own plan before administration began. Will your choice of which
proposal to accept depend upon that?
We are presenting our own plan. It doesn’t mean we’ll have
only one partner. It could be an investment partner and another airline. We have a standalone plan, which would be
with an investment fund, where the majority of the development is on long haul. We have other plans where we can
mix our plan with a potential carrier that is going to invest
in the company. Our goal is to increase the long-haul connectivity. That’s the only way. We can still compete well with
the low-cost carriers, but we cannot do only that; it can be a
portion to feed our long-haul connections. The [other] component is the medium haul, the connection between Italy
and European cities where EasyJet and Ryanair are working with very low fares. We could go to low fares, but then
we lose money. We can [use] our network to feed the international flights and be creative in other connectivities. We
have always competed with the high-speed train, but there
can be some integration [instead].
What’s happening at the management level?
In the past six months, the commissioners terminated 32
of the top managers, the foreigners who came during the
Etihad period, so there is some fresh air coming in. I’ve
been the general manager of Emirates for four years. The
revenues are coming in despite this situation, especially
on the Italian market. One of the reasons Chapter 11 exists
is to allow the company to reshape its future. You need
that phase to go back to your roots and decide what you
want to be.
“I’m not saying
all the problems
of Alitalia have
been solved. It
still needs a strong
can be a financial
carrier, a low-
cost carrier, a
Alitalia Is Now Judging the Suitors That
Propose to Lead It Out of Bankruptcy