Alitalia is forcing its intransigent pilots into a corner. The recent move by management to convert lower cost domestic subsidiary Avianova to a regional European operation follows the decision to wet-lease B767s on some transatlantic routes. Both moves mean cheaper labour for Alitalia and less work for its pilots.

The pilots have refused to agree to new contracts, which call for salary reductions and changes to working practices, since talks started last year. Management's forecast was breakeven in 1995, but without the pilot concessions this is unlikely to happen, the carrier admits.

The Avianova operation will use the 15 Fokker 70s Alitalia ordered recently to feed domestic traffic from destinations like Venice, Bologna and Turin into Alitalia's intercontinental hubs at Milan and Rome. The carrier will also link the secondary Italian airports with other regional European destinations. F70 deliveries begin in October.

The move to exploit the Avianova operation comes after the domestic carrier ATI was absorbed into Alitalia last year. Avianova is clearly the low cost option of the two and does not involve the replication of staff that ATI had. In 1993, Avianova produced a net profit of L1 billion ($600,000) on a turnover of L68 billion, while ATI was making only slightly higher profits of L1.3 billion on turnover of L1,327 billion.

The plans are clearly another warning to Alitalia's pilots that they could do themselves out of a job. 'It is part of the ongoing pressure to convince pilots that there are other vehicles to run their services,' says Charles Donald at UBS in London.

Source: Airline Business