Italy’s newest aviation offspring Italia Trasporto Aereo (ITA) has officially launched services today. While it got a last-minute deal to purchase the Alitalia name for €90 million and as such Alitalia will for the time being keep the familiar airline, the carrier will quickly sever the ties with its troublesome and loss-making predecessor. In the coming weeks, ITA Airways will be the new name. Arrivederci Alitalia - Ciao ITA Airways. In the final hour of October 14, 2021, some five Alitalia flights were racing home to their airports in Rome and Milan. But it was an Airbus A320 as AZ1586 from Cagliari (Sardinia) to Rome that was the very last flight of the old Alitalia to touch down at 11.21 pm local time at Fiumicino, ending 75 years of history. For decades the proud national airline of Italy that flew Pope John Paul II around the world, Alitalia’s history has also been marred by social unrest, heavy losses, failed partnerships, and political unwillingness to get things sorted out. It drove strong partners like Air France-KLM and especially Etihad crazy, the latter losing millions on a failed investment. Italian newspaper Corriere Della Sera published a graphic this week that sums up Alitalia’s years of woe. Since 2005, the carrier reported combined losses of €5.530 billion. Its best year was 2011 with a loss of only €6 million, its worst 2019 at €619 million. Mind you that this was before the pandemic. On numerous occasions, the government stepped in to stop the bleeding with another subsidy, sometimes deemed illegal by the European Commission as proved only last month. For the last four years, Alitalia was under special administration and state-owned. A graphic from Corriere Della Sera, showing the losses, fleet, and staff number of Alitalia since 2005/2005. (Corriere Della Sera) Starting more or less from scratch, at least without the burden of heavy debts, was seen as the only solution to retain an Italian ‘flag carrier’. So the Ministry of Economic Affairs and Finance formed Italia Trasporto Aereo in November 2020. Its business plan set out the target of “creating an efficient and innovative air carrier that will become a reference point in providing Italy with quality connectivity with both international destinations, thus boosting tourism and foreign trade, and within the Country, also taking advantage of the train-air integrated mobility.” It took a while and needed approval from Brussels to get the business plan on track and financed, but then ITA was ready to announce the launch from October 15. At first, ITA seemed not interested in taking over the Alitalia brand with its bad reputation. When the brand was auctioned for €290 million, this was way too high for ITA’s liking. Clever bargaining worked and reduced the price to €90 million, but many found it ridiculous that the government paid so much taxpayer’s money for something it already owned… However, during a press conference on October 15, ITA President Alfredo Altavilla said that his company had solely purchased the Alitalia brand to prevent it from getting into the hand of some other owner. Already, ITA will cost the Italian taxpayer €1.3 billion until 2023, money used in large part to purchase former Alitalia assets or mainly aircraft. The new carrier has started with 45 narrow-body and seven wide-body aircraft. One of them, an A320, has received the special ‘Born in 2021’ livery with which it operated from Milan to Rome on one of ITA’s first flights on October 15. The other aircraft still wear Alitalia colors with a decal ‘operated by ITA’ on the nose, operating under the familiar AZ-callsign. The website, however, said ‘Alitalia has ceased operations.’ New livery turns ITA's fleet into blue Retaining the Alitalia name at least has reduced the urgent need to change the name and livery on each aircraft. But during the press conference today, the new airline revealed not only its new name ITA Airways but also the new livery. The aircraft will be blue or 'azzuro', like the color of the national football team, with the tri-colore featuring on the vertical tailfin, as shows the artist's impression in the main picture. The new livery will arrive on the new aircraft that join the fleet next year. An Alitalia Airbus A320 operating as AZ0108 as one of the first ITA services to Amsterdam today. (Richard Schuurman) Where ITA should make a real difference from the old Alitalia is starting without inherited debts and at a much lower cost structure. The carrier has launched with just 2.800 employees and will add another thousand next year, but the business plan until 2025 never sees ITA Airways grow beyond 5.500 employees. That’s almost half of the 10.519 employees Alitalia had in 2020, which was half of the 21.294 back in 2004, as visualized in the Corriere graphic. The support from the unions will be crucial This has been the most painful part of the new airline: the redundancies. Italy’s strong unions, although not as strong as in the past, tried to enforce their will by calling out for strikes at Alitalia in the past weeks, frequently disrupting flight schedules. It remains to be seen how this ‘old tactic’ will affect and impact ITA. Will the unions continue to push for more, or has reality finally dawned upon them that the airline landscape in Italy has changed forever? The years that Alitalia was the only and dominant player have long gone since the arrival of low-cost competitors like Ryanair (at one time interested in taking over Alitalia), easyjet, Volotea, and more recently Wizz Air. Even Qatar Airways-owned Air Italy didn’t survive in this fierce market. The support of the unions will be crucial for ITA Airways. Lower costs are not only coming from reduced staff numbers, but also from developing more digital products for its customers and from operating new and more efficient aircraft. ITA confirmed a lease agreement with Air Lease Corporation (ALC) on September 30 for 31 Airbus aircraft for delivery between 2022 and 2025, and an MoU with Airbus for 28 more as a direct purchase. It plans to grow its leased fleet to 56 aircraft. By 2025, the fleet plan consists of 105 aircraft, of which 23 widebodies and 82 narrowbodies operating to 74 destinations. Will it work? ITA will have a tough job to regain the confidence of the customer, notably the Italian customer who might feel offended at how 75 years of history of Alitalia have been dumped. It will have a tough job getting support from the unions, although they must have realized by now that they have lost their war. ITA will even have a tougher job in establishing itself against the international low-cost rivals, which all have stepped up activities on the Italian market. Only by Q4 of 2022, ITA will have built its network to the 45 destinations it has set out in its plans. What ITA Airways is really capable of will not be seen until the carrier introduces its new fleet and new products. Let’s say in a year from now. Hopefully, for ITA, time is on its side.
