Because Ita risks a false start

29 August 20213 years ago babelfish

The flight offer by Ita from next 15 October does not cover all the flights that Alitalia has agreed to cancel. Remain uncovered areas that are anything but indifferent, in particular Sardinia and intercontinental connections. The economist Ugo Arrigo's analysis for the Subsidiary

Just a few days ago we highlighted the great uncertainty about the passing of the baton between Alitalia and Ita in the sale of bookings for flights scheduled from 15 October onwards. It has finally been resolved: Alitalia in extraordinary administration has removed these flights from its site and has therefore allowed Ita to take over the sales process. However, this outcome is partial and does not resolve the previous uncertainty, but merely displaces it from the marketing of flights to their actual production. In fact, will Ita be able to actually take off and carry out the flights it has started to sell from 15 October?

The previous question, which the media did not detect, is far from far-fetched. In fact, Ita currently has only two aircraft, one medium and one long range, leased by Alitalia itself in order to obtain the necessary authorizations from ENAC. To produce the flights it is selling, it should instead have the fleet with which it declared its intention to depart, consisting of 52 aircraft, of which only 7 are long-haul and the remaining 45 are medium / short. Therefore, at the moment 50 aircraft are missing that Ita intends to acquire from the extraordinary administration of Alitalia. Will he make it in the 50 days before the announced take-off of the aircraft with his livery? And is it correct to sell services for which one does not yet have the necessary capacity to produce?

I start from a reflection on the second question. If I have a two-room bed and breakfast, and at the same time I'm in negotiations to buy a fifty-room hotel, can I already put fifty-two rooms on the booking sites in two months? I fear that those who sell the rooms on my behalf require that I have actual availability for the dates in question. In the specific case of air transport services, I have the impression that, if it were a normal private company to implement a commercial practice of this kind, it would face many obstacles on the part of the regulators in the sector. But Ita is not a normal air transport company, it is the government that sends it. So how can you answer no?

Then comes the first question, if 50 days will be enough for Ita to take off the planned fleet for which it is already selling seats. There are indeed many things to do. On the one hand, the private negotiation with the commissioners of Alitalia for the sale of the business unit relating to the flight. On the basis of the information released by Ita itself, it was learned that on 16 August it sent Alitalia a non-binding offer and that yesterday this offer was transformed into a binding offer.

However, what exactly Ita intends to take from Alitalia has not been said and, even more so, how much it is willing to pay to obtain it. It is a pity that this information is not known to the taxpayer, who on the one hand is financing with 1.35 billion Ita for his future adventures in the skies and on the other has already spent over 2 billion from 2017 to today to keep the company operational. 'Alitalia which has been entrusted to him by the former private shareholders. Therefore, the sale of Alitalia to Ita is a sort of internal transfer in the assets of citizens-taxpayers, however completely without their knowledge.

Considering that by law the commissioners of Alitalia must sell to Ita and cannot sell to others, a provision that appears to be very inconsistent with the constitutional principle of the equality of all before the law, there are no requirements for corporate confidentiality that are interfere with full publicity of the binding offer of the public company ITA to the public management of Alitalia. The citizen-taxpayer wants to know what is done with his assets, no more and no less than he claims to know as a private citizen by the manager of his personal savings.

Another knot to be solved actually concerns the extraordinary administration of Alitalia: given that Ita only takes a part, less than half, of the flight branch, what happens to the other abundant half, destined not to switch to Ita? It certainly does not disappear nor can it be thrown away. Therefore it must be sold separately. It is a problem that I posed in the penultimate contribution to the Subsidiary : " No one pointed out that in the Alitalia stew there is a piece that has remained a ghost up to now and to which no one has noticed: that part of the aviation branch that Ita does not want . In fact, Ita takes less than half of the flight part that the commissioners received in 2017 from the private shareholders of the insolvent Alitalia. What will become of this part? ”. There is no doubt that it exists and that it cannot even be thrown away.

Therefore, by exclusion, it must be put up for sale. But perhaps, then, having been defined by Ita with the binding offer the perimeter that it desires, and which is even entitled to claim by law, the perimeter of the remaining flight part which could therefore find one or more several different buyers and make a significant contribution to mitigating the serious problem of the at least eight thousand Alitalia employees that Ita does not currently intend to take on.

In this way we arrive at the most serious problem of all, that of the workers . The most serious consequence of Alitalia's mismanagement over time and the Alitalia dossier by successive governments is the creation of a considerable number of redundancies, all completely fake. In the first place, their number: the eight thousand mentioned above concern only the direct employees of Alitalia to which must be added those generated in the related industries, in the companies that supply Alitalia. Alitalia's spending on the purchase of services on the market is four times the cost of its staff.

It can be estimated that half, therefore equal to double the cost of personnel, will not be replaced on the national territory by other carriers if Alitalia does not fly. It is therefore reasonable to multiply by at least three the total effect on national employment of each reduction in Alitalia's employment. The 8 thousand consequently become 24 thousand. What is the use of such an underpowered new public carrier as a result? Not to stay on the market, given that we are replacing in the ring of the air market a featherweight to the middleweight that has always been defeated by the heavyweights in the last twenty years. Not even to safeguard employment levels. Maybe to safeguard the level of losses we have been accustomed to all this time?

Secondly, why are all these redundancies fake? Because in Italy the air transport services sector had higher growth rates than Chinese GDP in the five-year period before Covid and therefore it is not possible for it to have redundancies. They exist only in a company that has been badly managed on the one hand and burdened with system charges (airport tariffs in the Fiumicino hub) much higher than its competitors. It is a pity, however, that no other large national airline companies capable of absorbing Alitalia's personnel have survived, nor does the new Ita want to do so.

And finally, we come to a particularly important observation: the offer of flights by Ita from next October 15th does not cover all the flights that Alitalia has agreed to cancel. Uncovered areas that are anything but indifferent remain, in particular Sardinia and intercontinental connections, as specified on the Ita website itself: "In this first phase it was not possible to include among the routes for sale those with public service obligations (such as for example the flights over Sardinia and Comiso) since Ita is not the assignee of the territorial continuity calls and cannot automatically detect these routes when Alitalia in AS ceases operations. […] In addition, for some non-EU destinations (Algeria, Argentina, Brazil, Japan, United States) Ita is completing the certification process necessary to start marketing and plans to sell tickets for these countries as soon as possible ”.

Yes, but when, the aspiring traveler asks? Furthermore, if all those falling within the countries listed above are removed from the list of announced long-haul destinations, present on the same page of the Ita website, it turns out that none remain. Therefore it is assumed that initially Ita will not make any long-haul flights, limiting itself to national and European destinations, most of which if not all already abundantly served by low cost carriers.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/per-ita-e-gia-falsa-partenza/ on Sun, 29 Aug 2021 13:34:50 +0000.