Tuesday, July 29, 2008

Alitalia - How long before the life support is switched off?

In my many years in Aviation I have watched a number of truly Great Airlines with a proud and long history die.

Some have declined slowly like your favourite Grandparent, who when facing problems large and small, which in days past they would have shrugged off, now just hasten the terminal decline. But although you expected it, still when they go, it is a shock - Pan Am springs to mind.

In other cases they are first weakened whilst they adapt to changing marketplace and then attacked from inside as if by a virus caused by owners asset stripping without
caring for the future.

Despite this they struggle to recover, only to be taken over because they are now under capitalised and have no strength to resist - TWA is a classic case.

Then there is the new generation Management Board taking the family fortune and investing it unwisely. Swissair.

Then there was Sabena - Heavily Unionised and worse still the Unions not only extremely powerful, but unable to see the new realities.
Staffing rules both National and Union which made the ability to operate efficiently desperately difficult, both on the Ground as well as in the Air.

This coupled with internal warring between Management Factions, some who desperately wanted to push through the changes they saw as vital and those who really saw no need to change and wanted to continue operating in some hypothetical golden past.

Sabena was a National Airline living in the 1960's despite the approach of a new millennium.

The fact that Swissair chose to invest so much of its fortune in Sabena was amazing at the time and remains a source of wonder to me now.

Of course it managed to survive to 2001, but the writing was on the wall a decade before and whilst some in Sabena did read it and tried their best to implement change, they were up against powerful forces not just Unions who it appeared were determined to stop any change, but even some Senior Managment who refused to see the realities.

Now there is Alitalia. There are differences with Sabena, but there are far too many similarities.

Heavy Unionised with the Unions having the same myopic view.
Some powerful Managers who want change as long as of course their division is exempt.
Others who see change as not just vital but long overdue, but are stymied by not just Union Power, Collegue Oppostiion, and even more importantly Political and Government Interference/Intervention, which makes the Beligian Governments relationship with Sabena appear as a very 'light touch' indeed.

When Air France-KLM bid for Alitalia was successful, I saw a direct correlation with Swissair - Sabena. When the plan was scuppered by a change in Italian Government, I believe Air France-KLM had had a very lucky escape.

Alitalia as currently constituted is NOT VIABLE. Without a massive downsizing both terms of routes, fleet, bases and therefore staff. A renegotiation of Ground and Aircrew contracts of the remaining staff, to bring these in line with commercial reality, not custom and practise, is also required, otherwise Alitalia will be forced to cease operations.

But the Italian Government and the Unions want Altialia to change and yet be the same This is a dream which even those smoking opium would have problems with.
As it is obvious Italy has not learned the lessons of Sabena, it is just a matter of time before the EU (European Union) steps in and stops more Italian Government financial aid and within a few months the money finally runs out and Aitalia is no more.

I have been saddened by the failure of all the airlines mentioned, Alitalia becoming an aviation historical footnote appears inevitable as the changes required cannot be implemented and even if there was sudden change of heart I believe it is already too late.

Too often in my career I have made a written prediction which I hoped was wrong, but believed was right and unfortunately I have in the vast majority of cases been proved correct. Alitalia please prove me wrong.

Other Posts on Alitalia in this blog:
13th January 2009:
Alitalia Reborn - But will it Survive?

06th October 2008:
Alitalia - Is the Opera entering its final act?

13th September 2008:
Alitalia - Have the Unions Killed the only hope?


29th August 2008:
Alitalia Files for Bankruptcy Protection




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