Bankruptcy: Alitalia will cease operations on October 15, 2021

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The Italian national carrier, Alitalia, will operate the last flight in history on October 15, 2021, the airline announcing overnight that it has stopped selling tickets and will cancel all flights since that date. His place will be taken by a new national airline called ITA (Italy Trasporto Aereo), successor supported by the Italian state.

ITA will inherit some of Alitalia's aircraft, staff and assets - such as airport lounges - but not Alitalia's flight schedule, which will be abandoned in favor of a new loyalty system to be run by a third-party company.

Owned by the Italian Ministry of Finance, with a deleted list of debts, plus a restart financing of 700 million euros, the airline in Rome will have, at least at the beginning, half the size of Alitalia, with only 52 planes, but intends to increase its fleet to 78 aircraft by the end of 2022 and 105 aircraft by 2025.

ITA will focus - initially - on domestic and intra-European flights and several long-distance routes from Rome and Milan to New York, Boston, Miami or Tokyo.

The new airline will employ less than a third of Alitalia's workforce, with 10.000 fewer employees, and will conduct competitive tenders for activities such as ground assistance and maintenance, as well as the company's loyalty program.

ITA will focus - initially - on domestic and intra-European flights and several long-distance routes from Rome and Milan to New York, Boston, Miami or Tokyo. "Broadly speaking, the plan should focus on the most profitable long-distance routes, especially those to the United States.", said ITA Executive Director Fabio Lazzerini. "The long-distance market means privileging the North American market, which is insufficiently served and extremely profitable, but further expansion is needed. South America needs to be kept on standby, we need to think about Asia and China, because Japan is doing very well. ”

The aim is to build a weaker carrier that can focus mainly on international markets, without being hampered by the costs and commitments that have made Alitalia a government department.

The government invested more than 5 billion euros in Alitalia after former shareholder Etihad Airways severed ties in 2017. Etihad invested 1.76 billion euros in 2014 to buy a 49% stake, followed by another 80 million euros for a 75% stake in Alitalia's MilleMiglia, which was the airline's loyalty scheme.

ITA has failed to enter into any alliances after years of talks with Lufthansa or Delta Air Lines.

Lazzerini believes the alliances will be "fundamental" to the future of the ITA, although the new airline has failed to enter into any alliances with Lufthansa or Delta Air Lines, after years of talks. "The world of airlines is a world of alliances. It's hard to be alone. There are few companies that are left alone and manage to survive. It is difficult to be isolated in a global world. ”

However, Lufthansa and other potential claimants who have accepted state aid from their own governments may either not invest in accordance with EU rules or risk a political backlash if they make such a move before repaying their own financing.

Long-distance travel also remains on standby due to travel restrictions still in place worldwide. Demand for business travel, which is usually a key factor for intercontinental travel, will only recover in a few years after the global pandemic, which has lasted more than 16 months.

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