The effects of Covid on Alitalia, the largest Italian airline

In this period of pandemic, which has caused a series of economic and social problems, even the most renowned companies have started to experience serious difficulties. This is the case of Alitalia, the largest Italian airline, which this summer risks taking off only about forty planes, with just over four thousand employees. According to Giuseppe Leogrande, the commissioner of Alitalia, the company’s difficulties are due to the lower compensation authorized so far by the EU, that is “272 million euros instead of the 350 million provided for by the [Relaunch] decree”, as well as the time needed to be able to initiate the obligations of the new Ita company. Due to the latter’s delays, Alitalia could risk not having the financial resources to pay its employees’ February salaries.

The company has already had difficulty paying the salaries of December and January, and will not be able to pay the salaries of February without the remaining 77 million in compensation from Covid allocated by Conte’s government.

Thus, the more time passes, the more they need to postpone the take-off of the new Alitalia, managed by the CEO of “Italia Trasporto Aereo” Fabio Lazzerini and by the president Francesco Caio. Commissioner Leogrande is therefore called to publish a new announcement for the sale of the assets and the carrier.

The procedure could take four or five months, forcing Italia Trasporti Aereo to take off in July, in the height of the summer season. If, in the worst case, take-offs are scheduled for the autumn, financially sustainable planes would drop from forty to twenty, still halving the number of employees.

Leogrande wrote a letter addressed to his employees, which says: “Dear colleagues, I would like to inform you personally about the situation of the Company, in the broader context of the emergency generated by the pandemic, also to clarify the news – not always exact or founded – circulating on our Company. Upon my appointment at the end of 2019, the Company was preparing to close an aeronautically “normal” year with a cash absorption of over 300 million euros of financial resources. This is the reason why the decree-law of 2 December 2019, in refinancing the company for an additional 400 million euros, assigned the Commissioner Management the task of initiating the sale procedures of the “business complexes” by 31 May 2020, ensuring the discontinuity economic and subject to the adoption of efficiency and reorganization measures. I therefore immediately proceeded to open the necessary discussions with the Commission in Brussels in order to define a transparent and non-discriminatory sales procedure, which would ensure economic discontinuity, within the terms established by law”.

If Alitalia were unable to get out of it, there would be many negative consequences for Italy, starting with the loss of work of thousands and thousands of company employees. No less important would be the damage to tourism, which in turn offers jobs to a very large amount of Italians. We just have to wait and hope that the government decides to give Alitalia what it is entitled to.

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