Alitalia: Lufthansa’s true aims and the uncertain future for Ita
Facts, comments and scenarios on the Alitalia-Lufthansa-Ita issue. The analysis of Gaetano Intrieri
Here we are, finally here we are. After four years of uninterrupted folly, now we are really one step away from the solution that the potentates of this country have always endorsed to get rid of this cumbersome and chronic problem called Alitalia: the sale to Lufthansa, or better. to say the sale to Lufthansa of the only asset that Germans are always interested in, namely the brand and its appeal on the market, especially in that market segment defined as a business that is particularly dear to the Germans.
At the same time, the former CEO of Air Dolomiti, Mr. Jorg Eberhart, now promoted to head of the strategy of the entire Lufthansa group, has been working with all the Italian government political forces for four years, to preach the word of what a great opportunity it would be. for Italy to hand over this annoying problem called Alitalia to the great Lufthansa. The real theme, however, is that beyond this suffocating lobbying work by the former CEO of Air Dolomiti supported by appearances by Lufthansa CEO Carsten Spohr in the key moments of this story, the Germans never thought of acquiring Alitalia with the his burden of problems of all kinds. The Germans want the Italian market or rather that part of the Italian market loyal to the Alitalia brand. After all, knowing that they cannot compete with Ryanair as a cost-leading operator, the market segment that was still in the hands of Alitalia is really the only one they can focus on to expand their market shares and justify their elephantine structure by oversized years due to acquisitions that have often turned out to be anti-economic.
To understand why it is so important for the Germans to expand their market share in Italy, it is necessary to analyze their numbers and certainly, starting with those of Air Dolomiti, the economics have not expressed anything good for too many years now, in terms of of profitability. Lufthansa today is an aggregate of various airlines that are very heterogeneous as a result of a strategy that is certainly more oriented to the financial dimension than to the industrial one. Lufthansa still manages to keep itself in a precarious balance of the income statement thanks to three substantial factors:
1. The effects of Wolfgang Mayrhuber's extraordinary work. The German manager, grown at home, who in 40 years of his working life at Lufthansa has held various top positions until he became its CEO. It is no coincidence that in the first decade of the millennium the German company under his management achieved the best income results in its history. Mayrhuber, true mentor of the branching strategy of services, had the great intuition to focus not only on passenger transport, but on all the services connected to it, first of all implementing air maintenance. It is no coincidence that the real family jewel is still the Lufthansa Techink airline maintenance company today.
2. The possibility of leveraging the resilience of economies of scale, easily achievable in a group so diversified and deep in its value chain
3. The effective management of the market in relation to the segment that includes the so-called business passengers, ie those with high yield who move substantially for business.
Within these three points are the industrial motivations for the Germans of the importance of acquiring Alitalia. But, the point is that the Germans, Alitalia is never interested as an airline, for the Germans acquiring Alitalia basically means three things in line with the points above:
1. Increase the market share of the business segment. Today more than ever, taking into account that this segment is strongly weakened by the effects of the pandemic and by the diffusion of tools such as Zoom or Teams or Meet, whose diffusion is inversely; proportional to the business man's need to travel and then take the plane.
2. The possibility of increasing operations in Italy and therefore trying to give an industrial sense to the now twenty-year investment in Air Dolomiti which has proved to be very little profitable for them also in terms of feederage;
3. Increase resilience on economies of scale which are a factor of considerable importance for a company where for years the financial dimension has dominated over that of the characteristic management of the company.
This is why Lufthansa has never been interested in acquiring Alitalia as some politicians find it convenient to declare, Lufthansa wanted and wants only some assets of Alitalia, the brand primarily for the reasons listed above that can easily be transferred to the Air Operator License of Air Dolomiti, creating the new German-powered Alitalia like the phoenix.
Lufthansa has worked well to achieve this legitimate goal, especially in terms of communication and lobbying, finding fertile ground among local politicians and journalists always ready to write whatever discrediting anyone in order to get some business tickets for an exotic destination, and I personally I know something. But, this is another story, it is the story of a strange day in November 2019 where at MISE, between two possible roads, the one that led to Lufthansa was chosen with the CEO Spohr who rushed to Italy accompanied by his faithful squire Eberhart and from some political entity to plead their cause. Today, talking about it is useless, we will have to talk about it at the right moment when someone finally wants to seriously analyze the causes of this unprecedented social butchery in which 10,000 people of our fellow citizens are paying a very high price in the general indifference of a public opinion literally atrophied by the media bombardment. deafening advocated by people who every single day in these 4 years have taken the trouble to discredit Alitalia and its employees as well as those who wanted to look for serious alternatives to this social butchery.
The CEO of Lufthansa is therefore now close to the goal, but there are still two last problems to be solved to perfect the acquisition of the brand, the first is to protect in some way those Italian political subjects who have always supported him and who today they are in great difficulty because they have lost every minimum level of credibility, the second unfortunately for him is generated by himself, in fact, having wanted to manage the extraordinary administration two subjects without any competence and leadership, precisely because they only had to making the paper passers, has meant that also due to the effects of the pandemic but above all of the commissioner's management of the last two years, the credibility of that brand, which has emerged unscathed from a thousand storms over the years, is nowadays at the minimum levels of appeal and credibility and therefore it will take a considerable investment to return them the far value they deserve. And it is therefore necessary to check whether, given the current European air transport scenario, the investment does not prove to be oversized Unfortunately, not all donuts succeed with the hole, but certainly today Lufthansa is a few meters from the finish line and we will soon see if with all due respect everyone, this chronic problem that afflicts and has afflicted entire generations of Italian politicians who have obtained a lot and given little from Alitalia, will finally be solved.
At this point I wonder who really cares about these 10,000 Alitalia people, a good part of whom are honest workers, with their families to support and with mortgages to pay. Let me be clear among them there were those who took advantage and speculated on the management drama that has gripped the company in the last twenty years, but they are really a minority. The majority of them, on the other hand, have been repeatedly humiliated since 2014 with the advent of Arab management and later taken for the seat by an impressive succession of political subjects and not only that have followed one another in the 4-year long Alitalia dossier of extraordinary administration that he had only about 4 billion of overtime public money squandered without anyone still asking for an account from those who managed them. All this would already be too much I would say, but in Italy too much is never enough and then here is the Italians after having lost about 4 billion with Alitalia in AS which in turn no longer even has the money to pay salaries to its employees , today they are called to invest in this strange subject called ITA, which is of no use to anyone and which will have the sole objective of burning further taxpayers' money.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/alitalia-lufthansa/ on Mon, 27 Sep 2021 07:54:38 +0000.