FOXTROTS

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.

Foxtrots – leading the industry in a dance.

 

TinT: Alitalia; the real facts.

 

TinT (Truth in Travel) Rides Again!

Surely I am not the only one who sees the charades at Alitalia with the purchase of 49% by Etihad?

 

Some comments:

 

-No report I have seen so far – even in French media – notes that Air France bought 25% of Alitalia in 2009, with an option to buy more after four years, 2013.

 

-It paid €322mn.

 

-Its aim was a close alliance, helping to return Alitalia to profits after a few years, etc etc.

 

-In 2013, AF did not participate in a €350mn capital increase (“give us more money”) in 2013, and thus saw its 25% reduced to 7%.

 

-In 2014 along comes a saviour – James Hogan, head of Etihad, with Abu Dhabi’s money stuffed in his pockets.

 

-It is not quite clear yet how much Etihad is paying for its 49%. The figures are complicated by another capital increase of €300mn. It seems €388mn.

 

-Look at those figures: around €1bn in new funds (at least) for Alitalia in the past five years; 25% cost €322mn in 2009, and 49% costs €388mn in 2014, meaning the airline was worth about €1.2bn in 2009, now just under €800mn, down one-third.

 

-AF expected Alitalia’s turnaround would take four years.

 

-Etihad expects Alitalia’s turnaround will take 2/3 years.

 

-Hogan talks of making “hard decisions”, and cutting some lossmaking routes and some aircraft. I could do that!

 

-He also talks of reducing staff by 1000.

 

-Alitalia’s CEO Gabriele Del Torchio says he is now ready to leave now his job is done. What!? He was hired only in 2013 to, among other things, start the process to return Alitalia to profitability. He now says his job was to “lead the company towards an alliance”. Either something is lost in the translation or Del Torchio is being economical with the truth. Alitalia is already in an ‘alliance’ (Sky), and if ‘alliance’ means partner, there was AF. Shamefully, such blatant contradictions are not noted in the mainstream media.

 

-Alitalia needs to lose 7000 of its 14,000 staff. Do that and there is a chance the airline can be efficient and profitable. Don’t, and you are playing games.

 

-Hogan will probably not be at Etihad to see his strategy fail (and thus can blame it on others for poor implementation). Abu Dhabi will accept publicly (privately, it surely knows already) in about three years that it has wasted its money and cut Alitalia loose, as well as Hogan, if he has not already gone by then.

 

-Hogan will be a hero in the aviation world for his “bold moves”.

 

 

The Fox

Remember, I’ll be famous after I’m dead.