Alitalia reportedly again on verge of bankruptcy

Not entirely surprising news, but important for CC members as Alitalia seems to come up as an option for many:-

Alitalia on verge of bankruptcy: report

 

ROME — Italian airline Alitalia is once more on the verge of bankruptcy as it loses 630,000 euros ($832,000) a day in addition to the 730 million euro deficit accumulated over four years under private ownership, the Repubblica daily said Friday.

 

The flagship company also risks being hit hard by the end of a deal with shareholders not to sell off their shares, which runs out on January 12, the report said.

 

The airline has two options: either being re-nationalised or ceded in a cut-rate deal to Air France-KLM, which in 2008 had offered 2.5 billion euros for the troubled company.

 

The take-over bid was blocked then prime minister Silvio Berlusconi.

 

...

Declaring bankruptcy is not the same thing as ceasing operations. AA, for example, was one of the last U.S. airlines to go through bankruptcy. The fact that the story says Alitalia is once again facing bankruptcy shows they've gone through it before and kept flying. Maybe they won't keep flying in the future, but the story doesn't mention any imminent cessation.

Declaring bankruptcy is not the same thing as ceasing operations. AA, for example, was one of the last U.S. airlines to go through bankruptcy. The fact that the story says Alitalia is once again facing bankruptcy shows they've gone through it before and kept flying.

When a US airline like AA goes "bankrupt", it's business as usual for a prolonged period.

In most of the rest of the world, going bankrupt usually means either ceasing operations immediately or pretty swiftly thereafter, particularly if there is no immediate rescue plan in sight. Given the parlous financial state now of the only likely rescuer of Alitalia, the longer-term future is not looking rosy - so it's something that CC members might want to bear in mind if they are choosing AZ for longer-term travel plans.

In a practically bankrupt country, it's definitely no surprise to see a practically bankrupt flag carrier.

I'm no expert but my understanding is in most of Europe both personal and corporate debt are far more difficult to walk away from than in the USA. After a bankruptcy, creditors generally foreclose on collateral and assets. After those are sold off the borrower still owes the remaining amount. So the creditor mentality is to stop the bleeding, sell assets, and be the first to the fire exit.

Several other European airlines have survived bankruptcy after creditors received guarantees from the government or after selling the airline and getting a payout. Both are unlikely in Alitalia's case.

Again, I may be off in some details but Alitalia's future in any form isn't rosy.

I'm no expert but my understanding is in most of Europe both personal and corporate debt are far more difficult to walk away from than in the USA. After a bankruptcy, creditors generally foreclose on collateral and assets. After those are sold off the borrower still owes the remaining amount. So the creditor mentality is to stop the bleeding, sell assets, and be the first to the fire exit.

 

Several other European airlines have survived bankruptcy after creditors received guarantees from the government or after selling the airline and getting a payout. Both are unlikely in Alitalia's case.

 

Again, I may be off in some details but Alitalia's future in any form isn't rosy.

Seeing as Italy's financial decisions come from Berlin... ;)

KLM-Air France has announced it will not back Alitalia anymore. They have said that the alliance with AZ "has not brought what they had hoped from it".

AZ has been saved so many times in the past that it is unlikely it will happen again.

I'm about to book a Choice Air flight from Rome to Miami. Operated by Alitalia and code shared with Delta. Should I book with Delta instead of Alitalia? Or based on the gloomy prognostications herein is the point moot because even if I book with Delta and Alitalia provides the flight....if Alitalia goes belly-up, what recompense do I receive from Delta? Help! I thought trying to decide on the right flight time was stressful enough before I read this!!

I'm about to book a Choice Air flight from Rome to Miami. Operated by Alitalia and code shared with Delta. Should I book with Delta instead of Alitalia?

That suggestion addresses only the single choice that you've identified, namely whether to book with Delta or Alitalia for those specific flights. I haven't gone in to all of the other considerations, such as whether you might want to choose an entirely different route or airline combination, or indeed to abandon Choice Air altogether. They raise far more permutations than a simple answer can deal with.

The whole country is just about as bad off as Greece

Thanks, Globaliser, in this case Choice Air's price for a one-way fare at the end of a TA is better than what I could arrange independently. Your point about if the ticket was with Delta I'd be their responsibility makes sense; that's what I'll do.

Thanks, Globaliser, in this case Choice Air's price for a one-way fare at the end of a TA is better than what I could arrange independently. Your point about if the ticket was with Delta I'd be their responsibility makes sense; that's what I'll do.

You may be Delta's responsibility BUT you may not get home when you expect to get home. And unless you can read the FARE RULES for your Choice Air ticket, you have NO IDEA what rights you have in relation to what Delta can or MUST do for you if Alitalia goes up in smoke and you must fly Delta home. There is a 95% chance you will be at the bottom of the barrel for rebooking if Delta has to put Alitalia passengers on their planes. May be a day or two before you have seats available.

What are your travel dates? I posted on your other thread. As a general rule, you can find a ticket that is VERY comparable in price to what Choice Air has. AND get full perks and protections from your PUBLISHED fare ticket.

You may not have a nonstop or one stop flight. MAY be a couple of stops. BUT if you use Aer Lingus to fly to MIA, you clear Customs in Ireland. NO standing in line when you reach the USA. Grab your luggage and go wherever you want to. There are a LOT of benefits to flying foreign carriers. They offer TRUE one way pricing. Transport through Ireland allows up to a 2 week vacation with no upcharge on air fare. Transport through Iceland allows time in Iceland with no upcharge. Air Transat (if the dates work) offers some spectacular pricing a lot of time into Canada and then on to the USA.

You may not even be Delta's customer on a Cruise Air ticket and that's why the airline will take care of their customers first. In that case you will be a customer of whoever sold you the ticket, since the airline gave them a good deal far in advance to wash their hands of further sales and marketing costs.

I am considering a flight on delta.com that is operated by Ailtalia form Newark to Rome to catch a ship the next day.

Would Delta get me on a flight soon since they sold the ticket?

Our other option is American and they are about as reliable.

I am considering a flight on delta.com that is operated by Ailtalia form Newark to Rome to catch a ship the next day.

Would Delta get me on a flight soon since they sold the ticket?

Our other option is American and they are about as reliable.

I would consider AA far more reliable than Alitalia. Booking through the DL website will put you ahead of non-customers on consolidator tickets. Your rebooking priority will depend on the fare paid and whether you have any elite status. Also note that the next available flight may be a few days later. There aren't a lot of open seats between New York and Rome during peak season.

Your exposure is if Alitalia stops flying on your day of travel or a few days before. If it happened earlier there will be time to make other arrangements.