Lufthansa Planning ‘New Alitalia’

Lufthansa Planning 'New Alitalia'

It’s emerged in the last few weeks that Germany’s largest airline, Lufthansa has been in talks with Alitalia and the Italian Government to acquire some of the failing airline’s assets. In particular, Lufthansa wants to buy the Italian airlines Aircraft, Runway slots and their route network. The German carrier has said that it isn’t interested in taking over Alitalia in its current form, however, they indicated they would be happy to take on some of the 11,000 employees in a bid to relaunch the failing airline completely.

Lufthansa is no stranger to bailing out other airlines or being the first to take on assets of other failing carriers. Only last month Lufthansa agreed to take on some of the bankrupt airline, Air Berlin’s aircraft and 3000 of the 8000 workers currently employed, so this latest move is no surprise to many.

I recently looked in to the future of Italy’s national carrier as they fight to stay alive after entering administration for the second time in a decade. At the time of writing that article, Lufthansa had not made any offers for the airline, they had instead waited until a revised deadline set out by the Italian government to put forward their proposal. This last minute bid has meant the Italian government were forced to extend the deadline again to April 2018 and fork out an extra €300m to keep Alitalia going, while talks over the offer could begin.

Lufthansa has said that they would like to take on the cabin crew and pilots of Alitalia and some of its aircraft and slots so that they can relaunch a ‘New Alitalia’ that would hopefully turn a profit. The offer made by Lufthansa doesn’t however cover any of the Italian airlines ground operations.

A spokesman for Lufthansa said: “The Lufthansa Group has submitted an offer letter today, expressing its interest in establishing a “New Alitalia”. Lufthansa has opted not to make an offer for the complete Airline but has stated interest in only parts of the Global network traffic and European and domestic point-to-point business. The offer includes a concept for a newly structured Alitalia with a focused business model (“New Alitalia”), which could develop long-term economic prospects.”

Lufthansa said that for a ‘New Alitalia’ to be successful it would require massive restructuring which could lead to more than 6000 jobs being lost. A prospect the unions and employees will not be happy with. After all It was the employees who had already refused an offer from the current shareholders that would’ve seen 3000 job cuts earlier this year.

The Italian newspaper Corriere della Sera has said the offer was likely to be rejected by the three state commissioners who were appointed by the Government to run the carrier after it entered administration.

Details about the bid from Lufthansa are still not completely clear due to a confidentiality agreement between both parties, but the offer is believed to have been in the region of around €500m. The Italian government and administrators now have until April 2018 to finalise the deal before the money loaned to the airline by the government runs out.