Can renationalisation get Alitalia off the ground?

Italy’s perennially lossmaking national airline has been a thorn in the side of governments for decades. Now, with the carrier renationalised as a result of the Covid-19 crisis and injected with E3b on top of existing state loans, Italy is working on yet another relaunch of an airline that has not posted a year of net profit since the start of the millennium. PM Giuseppe Conte last week described Alitalia as “a project, a newco” and that the government’s plan would be focused on preserving the connectivity of the airline’s international and domestic network. “We must try to protect this space in the market because it is important [for Italy] to have a carrier,” he said, but offered few other details. Founded by the government at the end of the second world war, the carrier thrived for four decades as the public purse paid for an expansion of its fleet, staff and routes until its first crisis emerged in the 1990s. But with the aviation industry tentatively resuming flights, Italy has to decide whether to appoint an insider to lead the overhaul, or try to make a clean break with the past and bring in a new face. An announcement is expected in the coming weeks, according to a person familiar with the matter. Although no formal strategy has been unveiled, Alitalia is expected to be handed a monopoly for air transport between Sicily and mainland Italy, as well as other minor islands. More controversially, some Italian media reports have suggested the government may even seek to impose Alitalia’s employment contract framework on all other carriers operating in Italy — a move that lawyers say would be immediately challenged.<br/>