Two years ago, the debt-laden Alitalia, that had been a state-run company for more than 60 years, was bleeding up to 3 million of euro a day on rapid rise in fuel costs. In a struggle to avoid bankruptcy, the carrier auctioned its paintings that would hang in its first-class and VIP lounges to reduce loss. In a surprising move, the Italian carrier posted a better-than-expected performance in 2009 and said it should break-even in 2011.
One year under private ownership
Early 2009, Italy’s state-run airline was sold to private investors: 75% to Italian investors and 25% to Air France. “The only purpose of going under private ownership was to cut costs. This way, you can have better prices and gain competitive edge”, Marco Rottino (photo) Alitalia’s country manager for Romania, Moldova and Bulgaria told Wall-Street in an interview.
The first and most important step in slashing costs was the massive staff reduction. “From 20,000 workers now we have only 13,000. Even in case of Tarom, a potential sale to private investors would bring about a severe workforce cut”, said Rottino.
On the other hand, the financial crisis had opposite effects too: Malev moved back under state ownership. The Hungarian government acquired 95% in the airline carrier from its majority shareholder, a Russian bank, after its last attempt to sell the carrier to private investors had failed.
Another area the carrier cut back on was the fleet. “We ordered 90 Airbus A330 (for long-haul flights) and Airbus A320 (for medium-haul flights), that will be shipped 1-2 a month until 2013, when we’ll have the newest fleet in Europe. As soon as it completes, old aircrafts will go out of operation. The new aircrafts will allow us to cut fuel and pollution costs”, said the head of Alitalia.
After its old aircrafts cease operation and the 90 Airbus are shipped, the company’s fleet
