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Alitalia is dying and being reborn as a new airline called ITA – see the full history of Italy’s troubled flag carrier

The struggling airline favored by the Pope has survived thus far on loans from the Italian government and failed investments from foreign airlines. ...
FILE PHOTO: An Alitalia Airbus A330-200 airplane is pictured at Leonardo da Vinci-Fiumicino Airport in Rome, Italy, March 30, 2019. REUTERS/Alberto Lingria/File Photo
An Alitalia Airbus A330 airplane is pictured at Leonardo da Vinci-Fiumicino Airport in Rome

  • Government-owned Alitalia is ceasing operations on October 15 after failing to secure investors, marking the end of its 74-year era.
  • The national carrier will be replaced by Italia Transporto Aereo, a brand new airline independent of Alitalia that will not be responsible for the old carrier's debt to the state.
  • ITA plans to purchase 52 Alitalia aircraft, acquire its slots at Milan Linate and Rome Fiumicino airports, and hire over 2,500 employees.
  • See more stories on Insider's business page.

After a long run of trying to secure investors, Alitalia is officially closing its doors.

Italy's national carrier Alitalia has had a rocky past full of financial struggles, employee strikes, and other damaging events, forcing it to make the decision to cease operations on October 15 after 74 years of service. The airline stopped the sale of tickets in August and has committed to refunding all passengers who were booked on flights after October 14.

On the day the airline closes in October, the country's new flag carrier Italia Transporto Aereo will take its place.

Here's a look at Alitalia's storied past and the plan of its successor.

Alitalia as a brand began in 1946, one year after World War II ended, first flying in 1947 within Italy and quickly expanding to other European countries and even opening intercontinental routes to South America.

Alitalia DC-3
Passengers disembarking from an Alitalia Douglas DC-3 aircraft.

Source: Boeing and Alitalia

The full name of the airline was Italian International Airlines, a joint effort between the United Kingdom through British European Airways – a precursor to British Airways – and the Italian government.

British European Airways Vickers Viscount
A British European Airways Vickers Viscount.

Source: Boeing and Alitalia

True to its name, Alitalia flew its first with Italian aircraft produced by now-defunct manufacturers in aerospace including Fiat and Savoia-Marchetti.

Alitalia Fiat G-12
An Alitalia Fiat G-12.

Source: Boeing and Alitalia

Following a merger with Italy’s other airline, aptly named Italian Airlines or Linee Aeree Italiane, in 1957, Alitalia – Linee Aeree Italiane became Italy’s top carrier.

LAI Douglas DC-3
A Linee Aeree Italiane Douglas DC-3.

Source: Boeing and Alitalia

Armed with a sizeable fleet of 37 aircraft including the four-engine Douglas DC-6 and Corvair 340, the airline was ranked 12 in the world for international carriers.

Alitalia
Passengers disembarking an Alitalia aircraft.

Source: Boeing and Alitalia

As Europe returned to normalcy following the war, so did Italy and the 1960s became a pivotal decade for both the country and its airline as the 1960 Summer Olympics would be held in Rome.

Alitalia Roma 1960
An Alitalia poster highlighting the upcoming Olympic Games in Rome.

Source: Boeing and Alitalia

The year saw Alitalia carry over one million passengers, introduce jets into its fleet, and move to a new home at Rome’s Fiumicino Airport.

Rome Fiumicino Airport 1961
Rome's Leonardo da Vinci Fiumicino Airport in 1961.

Source: Boeing and Alitalia

Alitalia entered the jet age with a mix of European and American aircraft such as the Sud Caravelle SE210…

Alitalia Sud Caravelle
An Alitalia Sud Caravelle.

Source: Boeing and Alitalia

And the Douglas DC-8.

Alitalia DC-8
An Alitalia DC-8.

Source: Boeing and Alitalia

American aircraft largely comprised the airline’s fleet once settled into the jet age with a short-haul fleet featuring the McDonnell Douglas DC-9 and later the McDonnell Douglas MD-80…

Alitalia MD-80
An Alitalia MD-80.

Source: Boeing and Alitalia

Complemented by a similarly American-dominated long-haul fleet consisting of aircraft such as the Boeing 747.

Alitalia Boeing 747 Pope John Paul II
An Alitalia Boeing 747 chartered by Pope John Paul II.

Source: Boeing and Alitalia

The arrival of the 747 was a seminal moment for Alitalia and it was the first aircraft to wear the airline’s famed green, white, and red livery with an “A” shape on the tail.

Alitalia tail
Alitalia's red and green "A" tail design.

Source: Boeing and Alitalia

Alitalia was the first European airline to transition fully into the jet age and continued the switch with more wide-body aircraft such as the Airbus A300.

Alitalia Airbus A300
An Alitalia Airbus A300.

Source: Boeing and Alitalia

Other aircraft that would join the Alitalia jet fleet included the McDonnell Douglas MD-11, McDonnell Douglas DC-10…

Alitalia McDonnell Douglas MD-11
An Alitalia McDonnell Douglas MD-11.

Source: Boeing and Alitalia

And Boeing 767-300ER for long-haul flights.

Alitalia Boeing 767-300ER
An Alitalia Boeing 767-300ER.

Source: Boeing and Alitalia

Alitalia even had uniforms designed by Georgio Armani, who also contributed to aircraft interior designs.

Georgio Armani
Italian designer Georgio Armani.

Source: Alitalia

The airline’s short-haul fleet later included a European favorite, the Airbus A320 family.

FILE PHOTO: An Alitalia Airbus A320-200 airplane comes in to land at Fiumicino airport in Rome, Italy October 24, 2018. REUTERS/Max Rossi/File Photo
An Alitalia Airbus A320 airplane approaches to land at Fiumicino airport in Rome

Source: Boeing

As Italy’s national airline, Alitalia was also known for flying the Pope with the papal plane using the flight number AZ4000, better known as Shepherd One

Alitalia Pope Shepard One
An Alitalia plane chartered by the Pope.

Source: Telegraph

Despite rising traffic throughout its history with Italy being a popular European tourist and leisure destination, the airline struggled with profitability.

Alitalia
Alitalia check-in desks at Rome's Fiumicino Airport.

As a state-owned airline, Alitalia could always depend on the government to keep it flying, until the European Union stepped in and forbade financial support in 2006.

Alitalia Airbus A330
An Alitalia Airbus A330.

Source: New York Times

The 2000s then saw serious discussion into Alitalia’s future with the Italian government wanting to sell its stake in the airline. The airline was opened for bidders in 2007 but yielded no results.

Alitalia
A crow flying passed an Alitalia plane.

Source: New York Times

Air France-KLM Group, the parent company of Air France and KLM as well as several smaller European airlines, then offered to buy the struggling airline but couldn’t get labor unions on board and the deal collapsed.

Alitalia/Air France-KLM
Alitalia and Air France-KLM Group signage.

Source: Reuters

The Italian government, not wanting to lose its flag carrier, continued to prop up its airline via emergency loans in violation of European Union rules.

European Commission, Union, Brussels, flag
The European Commission in Brussels.

Source: European Union

The third attempt in two years to sell the airline came after the Air France-KLM Group deal collapsed with an investors group forming the Compagnia Aerea Italiana to purchase the airline, despite heavy pushback from labor unions.

Alitalia Boeing 777
An Alitalia Boeing 777.

Source: Reuters

This Alitalia began operations in 2009, with Air France-KLM soon coming back into the picture taking a 25% stake from CAI.

Air France/Alitalia Joint Venture
Alitalia meeting with Air France, Delta, and KLM executives.

Source: Financial Times

The new airline quickly began differentiating itself from its former self, leasing aircraft instead of purchasing them with the fleet consisting of the Airbus A330 family…

Alitalia Airbus A330
An Alitalia Airbus A330.

Source: FlightGlobal

And Boeing 777 family comprising the airline’s long-haul fleet.

Alitalia Boeing 777
An Alitalia Boeing 777.

Source: FlightGlobal

It wasn’t long before Alitalia was plagued with issues ranging from union strikes to underperforming subsidiaries and even a sting operation that saw Alitalia employees arrested for theft, according to contemporaneous news reports.

Alitalia strike
Alitalia workers protesting at Fiumicino Airport.

Source: New York Times and BBC

With bankruptcy looming in 2013, Alitalia secured another bailout with help from the government that highlighted the need for restructuring.

Alitalia Airbus A320
An Alitalia Airbus A320.

Source: New York Times

Alitalia saw a new investor in 2015, Eithad Airways, which would take a 49% stake in the airline and Alitalia – Compagnia Aerea Italiana became Alitalia – Societa Aerea Italiana.

Alitalia/Etihad
Alitalia and Etihad celebrating a new partnership.

Source: Alitalia

With a new investor in tow, Alitalia began cost-cutting measures but facing a backlash from employees due to planned job cuts, the airline began bankruptcy proceedings and the government announced Alitalia would be auctioned.

Alitalia and Etihad
Alitalia and Etihad's merger livery.

Source: Reuters

Meanwhile, another airline was positioning itself to become the new Italian flag carrier, the aptly named Air Italy.

Air Italy Airbus A330 200
An Air Italy Airbus A330-200.

Rebranded from Meridiana, a regional Italian airline, Air Italy was jointly owned by private company Alisarda and Qatar Airways.

Qatar Airways Boeing 777
A Qatar Airways Boeing 777-200LR.

The airline chose Milan as its main hub ceding Rome to Alitalia. Long-haul flights from Milan to New York began in June 2018, with expansion to Asia happening soon after.

Air Italy Marco Rigotti
Air Italy's inaugural ceremony for Milan-New York flights.

Affected by the grounding of the Boeing 737 Max and without the Italian government as a benefactor, Air Italy closed up shop in early 2020, giving back full control of Italy to Alitalia.

Alitalia Airbus A320
An Alitalia Airbus A320.

While Air Italy was getting its start, the Italian government would once again seek outside investors with European, North American, and Asian airlines expressing interest in Alitalia.

Alitalia aircraft
Alitalia aircraft in Italy.

Among those interested were UK low-cost carrier EasyJet…

FILE PHOTO: EasyJet airplanes are pictured at Tegel airport in Berlin, Germany, November 14, 2019. REUTERS/Fabrizio Bensch/File Photo
EasyJet airplanes are pictured at Tegel airport in Berlin.

Source: Bloomberg

Irish low-cost carrier Ryanair…

FILE PHOTO: A Ryanair commercial passenger jet takes off in Blagnac near Toulouse, France, May 29, 2019. REUTERS/Regis Duvignau/File Photo
A Ryanair commercial passenger jet takes off in Blagnac near Toulouse.

Source: The Guardian

The Lufthansa Group…

Lufthansa airplanes are seen parked on the tarmac during a strike of cabin crew union (UFO) at Frankfurt airport, Germany November 7, 2019. REUTERS/Ralph Orlowski/File Photo
Strike of Germany's cabin crew union UFO at Frankfurt airport.

Source: CNBC

Delta Air Lines…

Delta Air Lines Boeing 777
A Delta Air Lines Boeing 777-200.

Source: Bloomberg

And China Eastern Airlines…

china eastern airlines airplane
A China Eastern Airlines Airbus A320.

Source: Reuters

As well as Italian railway group Ferrovie dello Stato Italiane.

Ferrovie dello Stato Italiane
A Ferrovie dello Stato Italiane train.

Source: Reuters

One after the other, the airlines dropped their interest, and ultimately, the Italian government re-nationalized the airline on March 17 during the coronavirus pandemic.

Alitalia coronavirus.
Alitalia was re-nationalized amid the coronavirus pandemic.

 

 

Despite bailouts from the state, the pandemic and subsequent lockdown of Italy took the ultimate toll on Alitalia, forcing it to make the decision to close the airline and launch a new one.

Alitalia aircraft in the Frankfurt airport
Alitalia aircraft at the Frankfurt airport

As of August 25, the airline stopped selling tickets and announced on its website that it would be offering free flight changes or refunds for passengers booked on Alitalia flights after October 14.

People at Alitalia check in counter
People at Alitalia check in counter

When the airline ceases operations, its successor, Italia Transporto Aereo, will take its place.

ITA app and logo
ITA app and logo

Talks between the European Commission and Italy over Alitalia and ITA began in March 2021, with Rome designating 3 billion euros ($3.6 billion) to establish the new flag carrier.

ITA logo with Alitalia aircraft passing in front
ITA logo with Alitalia aircraft

Source: Reuters

Initially, ITA was slated to begin operations in April 2021, but lengthy discussions between Italy and the European Commission delayed its launch.

Flags outside European Commission building in Brussels
Flags outside European Commission building in Brussels

Source: Reuters

Part of the negotiations focused on confirming ITA’s independence of Alitalia to ensure it did not inherit the billions of debt the old carrier owed to the state.

Alitalia Airbus A319
Alitalia Airbus A319

Source: Reuters

Talks also included asking ITA to forfeit half of Alitalia’s slots at Milan Linate Airport, which the airline was unwilling to do.

Alitalia aircraft sit at Milan Linate airport
Alitalia aircraft sit at Milan Linate airport

Source: Reuters

ITA determined giving up that many slots at Linarte would be too big of a loss and proposed forfeiting slots at Rome Fiumicino Airport as a compromise.

Alitalia check in counter Leonardo da Vinci Fiumicino airport
Alitalia check in counter Leonardo da Vinci Fiumicino airport

Source: Reuters

At the end of the discussions, negotiators agreed to allow ITA to keep 85% of slots at Linate and 43% at Fiumicino.

Green ribbon barrier with the ITA airline logo inside the Leonardo da Vinci airport
Green ribbon barrier with the ITA airline logo inside the Leonardo da Vinci airport

Source: Reuters

Also under negotiation was Alitalia’s brand and its loyalty program, MilleMiglia. The European Commission said ITA would have to give up both.

Alitalia Airbus A320
Alitalia Airbus A320

Source: Reuters

Under European Commission rules, MilleMiglia cannot be bought by ITA and must be put out for public tender, meaning another airline or entity outside the aviation industry can purchase the program. There are an estimated five million MilleMiglia miles that customers have not been able to use.

Customer checking into an Alitalia flight
Customer checking into an Alitalia flight

Source: EuroNews

However, ITA can bid on Alitalia’s brand, which it plans to do in a public tender. The airline believes the brand is “an essential element in carrying out its industrial plan.”

Alitalia aircraft
Alitalia aircraft

Source: Reuters

ITA will begin operations on October 15, the day after Alitalia’s last flight. The new airline secured €700 million ($830 million) in funding, which will help it purchase some of Alitalia’s assets.

Alitalia employees with new livery in 2015
Alitalia employees with new livery in 2015

Source: Reuters

The successor plans to purchase 52 of Alitalia’s aircraft, seven of which are wide-body.

Alitalia Boeing 777
Alitalia Boeing 777

Source: Reuters

By 2025, the airline expects to have 105 aircraft in its fleet and earn over 3.3 billion euros in revenue.

Alitalia aircraft in Ukraine
Alitalia aircraft in Ukraine

Source: Reuters

As far as the over 11,000 Alitalia workers, they will be considered for employment with ITA. The successor plans to hire 2,750-2,950 people this year and expects staff numbers to grow to 5,550-5,700 by 2025.

Alitalia staff at Milan Linate
Alitalia staff at Milan Linate

Source: Reuters

While it is the end of an era with the closing of Alitalia, there are high hopes for its successor.

Alitalia plane with ITA logo
Alitalia plane with ITA logo

Read the original article on Business Insider

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