Alitalia ousts CEO as annual losses deepen in 2012

Washington DC
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Alitalia has named a second chief executive in as many years as it revealed deepening annual losses in 2012 while completing a sweeping, four-year fleet renewal programme.

Roberto Colaninno, Alitalia chairman, has been named interim CEO as the board of directors searches for a replacement for Andrea Ragnetti, who himself was appointed with the release of the 2011 annual results.

In a year described in Alitalia's press release as "one of the worst years in the field of European air traffic memory", the Italian flag carrier's losses worsened to nearly €280 million ($369 million) in 2012, compared to €69 million in the previous year. A depreciation charge of nearly $120 million added to a pre-tax loss of nearly $158 million.

Pre-tax losses for the Alitalia group, which includes Air One, grew higher in 2012 despite a 3.3% growth in revenue year-on-year to nearly $4.73 billion, including a 7% increase for international and long-haul routes.

Alitalia also reported a break-even operating result in the fourth quarter on revenues of nearly $909 million.

Net debt also rose to $1.35 billion, including $806 million charged to Alitalia's owned aircraft fleet.

The carrier's four-year fleet modernisation programme was completed on schedule last year. Alitalia retired 67 aircraft over the period, including all Boeing MD-80s and 767s. They were replaced by 55 new aircraft, including 21 new arrivals in 2012, consisting of Embraer E-175s and E-190s, and Airbus A319s, A320s and A330s. Another 89 aircraft received cabin upgrades, including new three-class interiors for 10 Boeing 777s.