Once its restructuring plan is finally in place Alitalia will start the search for more alliances, and it may even invite partners to take a share in developing the new hub at Milan/Malpensa, according to new chairman Fausto Cereti.

'We plan to be a piece of a global alliance that will go from Vancouver to Vladivostok,' Cereti said at a recent IIR conference in London. Alitalia would expand its existing codesharing alliance with Continental and seek new partners, he added.

'Malpensa will have its own operational head and will be very independent,' said Cereti. 'I foresee Malpensa may even be [operated by] a second company. We could make a joint development with some other partner.' This may help Alitalia solve its long term funding problem: even with the planned 3 trillion lire ($2 billion) capital injection further capital will be required by the year 2000 to help fund Malpensa and new aircraft.

Cereti said Alitalia had changed its stance on new entrant carriers. 'We are no longer trying to oppose the small companies from operating.' Instead, Cereti wants to encourage feed from low-cost carriers. He said the new competitors on Rome-Milan, Air One and Noman, had boosted the market and were providing new longhaul passengers for Alitalia, while their impact on Alitalia's shuttle service was limited to slowing growth.

Alliances and startups will help Alitalia to come to terms with its new policy of not trying to cover all markets itself, but instead concentrate on profitable markets with higher frequencies. Work is now continuing to define the details of the restructuring programme, following the unions' agreement in principle and the government's approval for state holding company IRI to inject half of the fresh capital. The European Commission may yet have something to say about IRI's plans.

The deal with the unions gives employees a 20-30 per cent stake in the airline, which is currently 90 per cent owned by state holding company IRI, plus three seats on the board. In return, the carrier expects unions to accept plans to make 2,800 employees redundant and hire new staff on different contracts. The restructuring programme also envisages strengthening information technology, increasing aircraft utilisation, reducing aircraft night stops outside Italy, establishing a second crew base at Malpensa, and improving the quality and consistency of service.

Malpensa is key to Alitalia's future because it means the carrier can escape from its unpopular policy of trying to force longhaul passengers from the north of the country to fly via Rome. However, some analysts say Turin would have been a better location for a hub, and the other airlines at Milan/Linate are protesting about the plan to make them transfer all routes with more than 2 million annual passengers to the new airport.

Richard Whitaker

Source: Airline Business