Saving and ultimatum: How did it come to this point? The history of the company Italian since its inception in 1947 until the present day, through a report by Giovanni Minoli known within the cultural container of "The History We " of Rai Educational. ***
AS ITALY ALITALIA
A crisis last act
The future of Alitalia today, after the failure of the negotiation of with Air France last spring, revolves around the provision of the Italian consortium Airline (Cai), which contains inter alia: 3,000 redundancies (ie employees affected by "measures integration of income and relocation ") and wages unchanged but with a clear and significant increase in productivity. Among the latest is the decision of the Minister of Economic Development, Claudio Scajola, to admit to the extraordinary administration procedure Alitalia Airport and Alitalia Servizi. Meanwhile, however, the Alitalia staff continues to protest and hope for a more advantageous agreement.
*** The Italian national airline, once a genuine national pride, an example of excellence and professionalism, seems to have become a heavy get rid of that burden. For over sixty years since first flight, made May 5, 1947, Alitalia faces a crisis that appears Fatal: bad management and waste that have followed over the years have made the company a budget hole capable of swallowing billions, while the fate of 20,000 employees is hanging by a thread.
born Alitalia
all began May 5, 1947 when from the first part of the City of Rome Alitalia flight to Catania. The plane is a three-engined Fiat G12, the ticket price is 7,000 pounds
. At the head of the company, officially founded 16 September '46 by a majority of IRI's Ambassador Giuseppe de Michelis but he resigned in '48 to make way for the Count Nicolò Carandini, the first member a triumvirate of directors who has managed to achieve great development of Alitalia:
Nicolò Carandini: President, liberal politician, with excellent international relations.
Bruno Velani: CEO, aeronautical engineer and military pilot.
Donato Saracino: General Manager, IRI man, shrewd and careful administrator.
Since 1948, for 10 years Alitalia grows continuously: open new routes, renewing the fleet and fly wherever there are Italians in the world. It is the companion reference to the African continent, where, as told by a steward Alitalia "a representative of the Italian Alitalia had more." In 1950, Jubilee year, Alitalia encompasses the sides, transcontinental airline also won the Italian and South American routes. Meanwhile, they board the DC-4 the first hostess who wear suits of the Fontana sisters. Two years after the company closes in on, investing in new aircraft cabin pressure to fly "above the clouds" and therefore faster and less "rough."
The company has a safety on a team of highly professional engineers and mechanics: attentive, good and fast enough to be compared with those of Ferrari.
In '54, thanks to more spacious air comes the tourist-class fares and economical air travel by luxury for a select few, becomes a means for the masses: a flight from Milan to London will cost 43,500 lire, and a Milan-Paris 19700. The food and service are also excellent, in-class eating caviar and drinking champagne.
On 1 September '57 Alitaia LAI merges with, another company with a majority IRI that Alitalia is divided de facto air transport in Italy: from the network, and passengers arriving LAI, and was created by merging a large national company that can finally compete with larger companies in the world. It is the pride of the nation.
In '60 became the official carrier of the Olympics and scored his personal best, over a million passengers. The same year change home and look: you move the airport "Leonardo da Vinci" airport, while the rudder is painted with the colors of the Italian flag.
completed his first 20 years Alitalia is already in 7th place in international transport in Europe is third behind British Airways and Air France. Connecting 70 countries, 140 billion bill and has 10 thousand employees around the world.
is also the first company to "bring in the sky" the Pope Paul VI, who in '69 goes on pilgrimage to Jerusalem.
Twenty years of success, then, thanks to a stable leadership, a good investment strategies and the certainty that the market is at this time. Difficult recognize today.
Here comes the "deregulation"
In the early 70s the world of the airlines is shaken by the oil crisis (which carry the fuel to the stars) and deregulation.
In 1978 U.S. President Jimmy Carter announced that the airline is suffering from "too much regualtion" and decided to drop the monopoly created by Roosevelt in '38. Deregulation literally changes the rules of the game opens up to competition and unleash a competition without rules, that rock-bottom prices. From the United States where the Pan Am, the largest airline in the world, failed in '91, the deregulation in other states bounces the world after 15 years of negotiations and three directives, even in Europe '97 is ready to Arttu.
The airline is losing the monopoly of domestic and European flights, and aviation market open to private companies that increase and decrease the cheapest prices. This almost everywhere except in Italy where, as Sergio Arienzo, Alitalia steward until 2005, "Deregulation means" to give public money ", that economic aid to cover debts often caused by the State through the use of political and electoral rather than entrepreneurial, national companies. As the ad hoc flights because they served the political and had to come from Sicily to Rome early morning carrying only four passengers, "" So if
the late '80s throughout Europe, the airlines and prepare business plans and laws to start the privatization and grow profitable businesses through alliances, Italy For its part left behind: it is still 100% controlled by the Treasury, not allies, has the empty crates, a few planes and too old. It is the beginning of a decline now seems unstoppable.
Cempella The direction and the first privatization
In the early 90's over-investment plan produced disappointing financial results as tensions begin to grow union dramatically.
In '96 the shareholder, or a State, shall appoint as Chief Executive Officer Domenico Cempella, a man who had always worked in Alitalia: "I found a situation that can be described like this: debts to $ 3 trillion, 150 billion in equity, 10 years of losses and a domestic situation because there were not very strong infighting among unions. He was a product that was not on the market, Alitalia was really technically bankrupt. "
As said Alitalia is behind other European carriers and needs as soon as possible to a real business plan aimed at two main objectives: growth and privatization.
Cempella first thing is certain cuts (the cost of labor rose from 27% of revenues to 20%), and then implements its plan to sell part of the shares (21%) to the employees themselves. This means more work for the same price, that is, shares in exchange for remuneration. Employees become shareholders and participate in strategies and decisions of the company by its save. With this move Cempella gets 4 years of peace in relation to strikes.
But in reality, not all unions are in agreement as Fausto Cereti said that Alitalia was its president from '96 to 2003: "The problem was that the ICFTU was favorable, while the CGIL considered the shares to employees a maneuver paternalistic "vallettiana" wanted a property to employees, the other wanted the master on the other side of the fence. So much so that the representative of the CGIL Cofferati ordered not to attend the two councils. " The CGIL
decides to leave the shares in the hands of the shareholder public today with the company's accounts in red are worth very little: more than 100 million lira fell to a few tens of euro.
For the first time in 1996 and then the public shareholders and that the Treasury of the Prodi government sells 37% stake in Alitalia. 21%, as mentioned, goes to employees, while another 15% is put on the market with an excellent result of scholarship: the privatization of Alitalia tying their employees gives the company confidence to investors. But soon these efforts will prove to be a wasted opportunity for state employees and the company.
Meanwhile in 1997, in the first phase of the plan, the accounts begin to return: the market capitalization goes from 600 to 6000 billion, Alitalia pay off debt for 3,000 billion and invests in the fleet for 2,500 billion. In the three years '97-'99 net earnings to reach almost one million dollars. The company is therefore substantially restored.
Europe hampers the recapitalization
Cempella According to the position Strategic Alitalia is difficult: too big to compete with small and too small for adults. For the CEO "development" means "change
size" and choose to become a global company.
Alitalia So far it was neither fish nor fowl, had no real direction as a manager and several short-lived, often with contradictory policies, prevented the company to choose its business and to be completely consistent bottom: on the one hand Roberto Schisano, CEO from '94 to '95, he had chosen in agreement with the shareholder a recovery plan that bet on low cost, and then the medium range, the President Renato Cowgirl in the two following years he worked the other hand, always agree with the shareholder, with a plan that focuses on long-range attempt an alliance (and failed) with British Airways. In '96
Cempella share estimate to $ 3 trillion needed to recapitalize. But since it is a public entity, the law provides that passes the examination by the European Community. In order to get the go ahead should the results of the plan, namely the profitability of the intervention of public action, is equal to the expected return from a private lender. That is, the state can recapitalize, re-energize economic your carrier, but as any private investor who expects a profit from financing in line with the market. He can not do so a grant. According
Cempella his plan meets the regulations, but at the end of the review process, the Community decided to give this the title of "State-compatible", meaning
putting the company for four or five years under protection prevented open new routes, buy new arerei and apply the best available rate on the same route.
For the For the Government had not done enough to avoid this decision: "The Italian State, the shareholder, agreed that" taxation " much more vigorous action when the government would probably have resulted in a different order. "
And in fact in those years, Air France and Iberia seek and obtain from the European Community to be able to recapitalize as finance market, despite their present business plan index premium (ie earnings) less than the plan that Cempella then approve an action by the Board of Directors "firmly convinced that the decision was unfair and unjust."
The appeal was won on December 12, 2000, but the company was too late. If so
as permitted by the European Community itself, not the reasons for rejection were in the business plan, where they were? The only answer that you give Fausto Cereti is tied to the interests that Europe itself was in Italy, especially in connection with "Malpensa 2000".
Malpensa Malpensa 2000
you start talking as early as '93 when the Council of Europe calls on member countries to develop links with Eastern Europe. Among the projects that Italy has to
"Malpensa 2000" for Europe to endorse in '94.
In December, the European Bank signs an agreement to provide to the SEA, the management company at the airports of Milan (owned City Council), more than 400 billion lire to be returned in 15 years.
is money intended to make a major hub of Malpensa, which is a provider of airport traffic, where the passengers find flights to all destinations, in competition with the Frankfurt and Paris. For Italy it is a great opportunity because a hub is an asset and a source of economic development. According to studies made by the Bocconi University in Milan, the airport would lead to node 150 thousand jobs and a value between direct and led 10 billion euro.
But to ensure the project calls for Europe to the Italian government together, and then rail and road accessibility. This will be one of the problems Malpensa, which will be a failure.
"I believe that Alitalia was initially skeptical of the hub - ENAC said the Director General from 1998 to 2003, Pierluigi Di Palma - So much so that calls to increase Alitalia's Malpensa slots on their own when was developing the project to expand the Malpensa! Everything changes when Prodi apparently goes to the government, because he was president of IRI and therefore has greater ability to convince the management Alitalia. On July 5, '96
Transport Minister Claudio Burlando issues a decree providing for the transfer from Linate to Malpensa, postponed to another date in order of all international and domestic flights, with passenger numbers exceeding 1,750,000 per year.
But foreign companies are concerned that the new hub is likely to steal traffic and then try to impede Malpensa 2000 and write to the Minister that the decree clearly favors the flag carrier. All are interested in having bases in Italy because it generates a lot of traffic so that for almost all foreign companies is the second largest after the internal movement. Not to mention the fact that the estimates give an increase in traffic in Italy 6%, three times that of other European countries.
The problems, however, are not only from abroad: some claim that the Lombard the distance of the railway on your area of \u200b\u200binterest is not flush but underground. This means much higher costs and implementation times are much longer than the commitments.
On 9 October '98, however, the Minister Burlando by a new decree fixing the date of opening of Malpensa 2000, to October 25. But that day the airport is not ready yet, missing links. The foreign companies and then declare, "we move to Malpensa links only when they are ready." And by a representative of Lufthansa, nine of them announced the action at the European Commission.
Who does not attend the press conference of a complaint against Italy Airfrance and KLM: the French and Dutch people want to maintain good relations with both the Italian government, which with Alitalia for its part to guard Malpensa desperately need a powerful foreign ally.
Alitalia needs an ally, it is in Cempella KLM
Domenico Cempella start negotiations with the Swiss, Dutch and French. Search Alitalia alliance does not pose in a weak position, but a partner to a union between equals, and who now answers this feature is KLM, as well as the same Cempella explains: "We start from a strong market presence in Italy and the absence in the Netherlands, the presence of a fleet in the Netherlands and the absence in Italy, were complementary in all business activities. "
KLM aircraft in fact more than they serve and their territories and seen their market have no chance of development, if not through a hub.
The agreement would lead to the creation of the largest European company: 39 million passengers, compared to 38 of Lufthansa, the 36's and 33's British Airway Airfrance, and 263 aircraft to 377 destinations, with revenues of over € 9 billion and considerable savings.
The master cooperation "was signed in '98 with the slogan" One ticket to the world ", with effect from 1 November of '99.
For the second time Alitalia in two years without the possibility of privatizing trauma, with an agreement that looks perfect. For the Dutch press Malpensa is a gift from God that justifies even an alliance called "risky". The Prodi government's plan, called "Project Hermes" is very simple: create two hubs, Fiumicino and Malpensa, managed by a company, created with the support of finance and Italian entrepreneurs, in which the government sells some of its actions Airports of Rome, Milan and the properties of the SEA.
But the government's plan must deal with many issues first and foremost the fact that the agreement with KLM is based around the new Meanwhile, Italian hub that fails to take off: if the first to protest against foreign Malpensa were only lines now also the SEA, the company that manages the airports of Milan, which calls before transferring flights are completed road works. With the SEA to protest, there are also 13 million passengers each year flock to Linate and especially the citizens of Milan used to quickly get to and from Linate Airport with 40,000 pounds of taxi against a train trip that would cost at least twice.
Losing the Malpensa 2000 project would be a blow for the country, and so in an open letter to Prodi tries to re-launch and March 25 '98 wrote in the Corriere della Sera, the mayor of Milan, Gabriele Albertini: "If we do not run for cover as soon as possible Malpensa will be condemned to a sure decline. Of all this I have spoken with the mayor of Milan, the answer I got was a stiff defense of a non-existent and indefensible primae Milan and Malpensa. In this way, the council of Milan Malpensa 2000 marks the sentence. "
Fausto Cereti explain and discuss the administration's stance of Lombardy: "It was the greed of the municipality of Milan to think that having two airports operating them would have sold at a higher price, which made him lose his head, and this depends by the fact that it is said that a person (Albertini) that was able to bring forward good factory 200 people are able to judge what happens in the air traffic .... "
plan fails the "Malpensa 2000"
On 21 October of '98 the Prodi government falls, it is now to govern Italy Massimo D'Alema, and the new Minister of Transport and Tiziano Treu.
Meanwhile, relations with Europe are more complicated: it granted the appeal of European companies about Malpensa and prompted the government to change the set of flights. On October 12, '99 Treu Minister reiterates the EU Commissioner Loyola de Palacio, the transfer will take place in accordance with the dates: 15 December '99 and December 15, 2000.
But to complicate matters plus the Minister for the Environment Edward Ronchi November 25, in agreement with that of cultural heritage, expresses a negative environmental impact assessment as
Malpensa is located in the Ticino Park. Therefore calls for a fresh examination of the program on the transfer of flights.
A month after Loyola de Palacio in a letter to the Minister Tiziano Treu reiterates doubts about Malpensa 2000 and calls to postpone the transfer of flights to make a precise analysis
impact and environmental measures.
This decision does not convince the President Fausto Cereti Alitalia: "We always call Europe to referee our internal affairs, but obviously if the arbitrator also tried to defend their own interests! Took advantage of a situation in which the lamb was being led by the pastor .... "
On 14 December '99, one day before the scheduled date of transfer, an agency ANSA says: "Tomorrow there will be the planned transfer of flights from Linate to Malpensa: the Minister has decided Treu agreement with the Prime Minister Massimo D'Alema.
It fails the agreement with KLM
The KLM decides to break the alliance 20 April 2000 for this reason: lack of development of Malpensa and lack of development of the Italian carrier. The Dutch company prefer to pay a penalty of 250 million euro provided that the door closer to failure, rather than being tied to Alitalia. Cempella for the failure of his project is a huge blow, "When that famous night, the Prime Minister said," you go to die "- after I came from a year of suffering almost daily having to convince the Dutch from time to time below to come to me - at that time began to realize that tying their fate by merging with an airline where the government was certainly not a friend of Alitalia, it was not what to do. It was the straw that broke the camel's back. For me, I resigned on December 13, 2000.
Alitalia is then to have to split itself in three leading airports, Malpensa, Linate and Fiumicino. This means: triple fleet maintenance triple, triple staff and hence costs triple.
After September 11 After September 11, passenger traffic worldwide suffer a significant decline. Alitalia is forced to cut international flights, international and national. But the losses continue to climb past the 500 billion lire.
Instead of Domenico Cempella is called Francesco Mengozzi. His plan includes cuts for 41% of the intercontinental sector, but the stewards for Alitalia is a grave error: "Delete the route to Beijing with a 80% coefficient filling and with a growing market was absurd. "
Amid the current Alitalia therefore take hasty decisions and wrong choice: focus on medium-haul and then compete with low cost impossible, when all the other companies give priority to the long-haul flights where the philosophy does not reward. The losses increase again in 2003 while global traffic suffers another fall and falling by 7.1%.
Alitalia reacts with new cuts and this time the expense is the airline personnel. Yet according to data from the AEA (Association of European Airlines) is the staff the truth (or at least the only one) of the problem. Nell'Yearbook 2007 states that between the main European airlines Alitalia has the lowest ratio of employees and aircraft in service: 61.45 employees per aircraft (rising to 99.94 if you add Alitalia Servizi), 246.53 against Air France KLM, the 158 , 31 of British Airways, Iberia, 159.34 and 232.21 of Lufthansa. Same goes for salaries: an Italian commander Boeing earns about € 8 thousand per month, 30% less than the European competition: 14 thousand British, 12 Iberia, 11,500 Lufthansa. It also says that the coefficient of work divided among the members is among the highest.
The only negative about the salaries of managers, among the highest in Europe. The real question then is Alitalia's mismanagement.
Personnel costs in Italy and then no more than 20% against 26% of other European airlines, but the cuts are made equally. On June 1, 2003 and then the staff on strike suddenly against the decision to reduce from four to three members on the Boeing and the blockade of overtime and holiday backward: in one day are canceled 250 flights, and only 1,300 out of 2,000 employees engaged in the service . The business plan
2003
In this emergency situation, the CEO Francesco Mengozzi asks for help to the American Glen Hauenstein, author of the rescue of Continental, which now states: "Surely the biggest problem was the property of the company. When I ask because here in Amerca Alitalia does not take off I say, "Imagine the U.S. government who runs an airline," The Italian State has had countless opportunities to get out of Alitalia, but in the end has always chosen to take control of the company " . In this regard
Fausto Cereti made the following diversification between Italy and the rest of Europe: "The difference is that while foreign companies are run by government in a discreet way, through real powers to management, we not be holding the State means the company must be serve the interests of the state, but the company must serve the interests of political forces. " The
October 30, 2003 at Palazzo Chigi Mengozzi presents the business plan 2004-06, which are the most common terms are "change" and "privatization", which provides for a recapitalization first and then the drastic reduction of the property that the Treasury must be reduced by 62% 50%.
In 2003, Alitalia and Air France are the only airlines to still be controlled by the state, but in April the French government announced: "privatized by the year and then married KLM.
On November 13 Prime Minister's office also announced that it has unlocked the privatization of Alitalia, although it does not say how or when. Against this announcement on November 28 in Alitalia strikes there are new: all unions are united against the privatization.
The Berlusconi government at this point is turn around, as Glen Hauenstein said: "They bowed to pressure from trade unions, did not want to take the road more difficult but in the long run would prove to be the fairest. Trying to implement the things following the daily whims of politics can never be a key to success.
in any type of financial activity. "
With Giancarlo Cimoli, Alitalia is increasingly in red
On May 6, 2003 Giancarlo Cimoli as the shareholder appoints new CEO, president and CEO. The company claims 1 million loss per day and the new business plan Cimoli approved by the Board of Directors September 20, 2004 once again provides new cuts.
On 8 October 2004, the Treasury acts as guarantor for a bridging loan of 400 million Euros needed to save the company, while on 11 November, the Council of Ministers approved a new scheme of
decree for the privatization of Alitalia, which authorizes the Treasury to come down from 62% to 49.7%.
Meanwhile, Alitalia loses flights to Sardinia for having "forgotten" to submit the documentation to participate in the tender. The slots on Sardinia are then taken by Meridiana and Air One.
debt the company continues to grow and is on the brink of bankruptcy. While the growing controversy about the salaries of managers of state-controlled companies: in 2005 a resolution of the Board of Directors, for example, doubled the salary of Giancarlo Cimoli rising to € 2,791,000 per year (6 times the CEO of Air France and three times that of British Airways). These gave way in 2006 first and then Berardino Libonati Maurizio Prato, and calls for 8 million euro severance pay.
The future of Alitalia today, after the failure of the negotiation of with Air France last spring, revolves around the provision of the Italian consortium Airline (Cai), which contains inter alia: 3,000 redundancies (ie employees affected by "measures integration of income and relocation ") and wages unchanged but with a clear and significant increase in productivity. Among the latest is the decision of the Minister of Economic Development, Claudio Scajola, to admit to the extraordinary administration procedure Alitalia Airport and Alitalia Servizi. Meanwhile, however, the Alitalia staff continues to protest and hope for a more advantageous agreement.
*** The Italian national airline, once a genuine national pride, an example of excellence and professionalism, seems to have become a heavy get rid of that burden. For over sixty years since first flight, made May 5, 1947, Alitalia faces a crisis that appears Fatal: bad management and waste that have followed over the years have made the company a budget hole capable of swallowing billions, while the fate of 20,000 employees is hanging by a thread.
born Alitalia
all began May 5, 1947 when from the first part of the City of Rome Alitalia flight to Catania. The plane is a three-engined Fiat G12, the ticket price is 7,000 pounds
. At the head of the company, officially founded 16 September '46 by a majority of IRI's Ambassador Giuseppe de Michelis but he resigned in '48 to make way for the Count Nicolò Carandini, the first member a triumvirate of directors who has managed to achieve great development of Alitalia:
Nicolò Carandini: President, liberal politician, with excellent international relations.
Bruno Velani: CEO, aeronautical engineer and military pilot.
Donato Saracino: General Manager, IRI man, shrewd and careful administrator.
Since 1948, for 10 years Alitalia grows continuously: open new routes, renewing the fleet and fly wherever there are Italians in the world. It is the companion reference to the African continent, where, as told by a steward Alitalia "a representative of the Italian Alitalia had more." In 1950, Jubilee year, Alitalia encompasses the sides, transcontinental airline also won the Italian and South American routes. Meanwhile, they board the DC-4 the first hostess who wear suits of the Fontana sisters. Two years after the company closes in on, investing in new aircraft cabin pressure to fly "above the clouds" and therefore faster and less "rough."
The company has a safety on a team of highly professional engineers and mechanics: attentive, good and fast enough to be compared with those of Ferrari.
In '54, thanks to more spacious air comes the tourist-class fares and economical air travel by luxury for a select few, becomes a means for the masses: a flight from Milan to London will cost 43,500 lire, and a Milan-Paris 19700. The food and service are also excellent, in-class eating caviar and drinking champagne.
On 1 September '57 Alitaia LAI merges with, another company with a majority IRI that Alitalia is divided de facto air transport in Italy: from the network, and passengers arriving LAI, and was created by merging a large national company that can finally compete with larger companies in the world. It is the pride of the nation.
In '60 became the official carrier of the Olympics and scored his personal best, over a million passengers. The same year change home and look: you move the airport "Leonardo da Vinci" airport, while the rudder is painted with the colors of the Italian flag.
completed his first 20 years Alitalia is already in 7th place in international transport in Europe is third behind British Airways and Air France. Connecting 70 countries, 140 billion bill and has 10 thousand employees around the world.
is also the first company to "bring in the sky" the Pope Paul VI, who in '69 goes on pilgrimage to Jerusalem.
Twenty years of success, then, thanks to a stable leadership, a good investment strategies and the certainty that the market is at this time. Difficult recognize today.
Here comes the "deregulation"
In the early 70s the world of the airlines is shaken by the oil crisis (which carry the fuel to the stars) and deregulation.
In 1978 U.S. President Jimmy Carter announced that the airline is suffering from "too much regualtion" and decided to drop the monopoly created by Roosevelt in '38. Deregulation literally changes the rules of the game opens up to competition and unleash a competition without rules, that rock-bottom prices. From the United States where the Pan Am, the largest airline in the world, failed in '91, the deregulation in other states bounces the world after 15 years of negotiations and three directives, even in Europe '97 is ready to Arttu.
The airline is losing the monopoly of domestic and European flights, and aviation market open to private companies that increase and decrease the cheapest prices. This almost everywhere except in Italy where, as Sergio Arienzo, Alitalia steward until 2005, "Deregulation means" to give public money ", that economic aid to cover debts often caused by the State through the use of political and electoral rather than entrepreneurial, national companies. As the ad hoc flights because they served the political and had to come from Sicily to Rome early morning carrying only four passengers, "" So if
the late '80s throughout Europe, the airlines and prepare business plans and laws to start the privatization and grow profitable businesses through alliances, Italy For its part left behind: it is still 100% controlled by the Treasury, not allies, has the empty crates, a few planes and too old. It is the beginning of a decline now seems unstoppable.
Cempella The direction and the first privatization
In the early 90's over-investment plan produced disappointing financial results as tensions begin to grow union dramatically.
In '96 the shareholder, or a State, shall appoint as Chief Executive Officer Domenico Cempella, a man who had always worked in Alitalia: "I found a situation that can be described like this: debts to $ 3 trillion, 150 billion in equity, 10 years of losses and a domestic situation because there were not very strong infighting among unions. He was a product that was not on the market, Alitalia was really technically bankrupt. "
As said Alitalia is behind other European carriers and needs as soon as possible to a real business plan aimed at two main objectives: growth and privatization.
Cempella first thing is certain cuts (the cost of labor rose from 27% of revenues to 20%), and then implements its plan to sell part of the shares (21%) to the employees themselves. This means more work for the same price, that is, shares in exchange for remuneration. Employees become shareholders and participate in strategies and decisions of the company by its save. With this move Cempella gets 4 years of peace in relation to strikes.
But in reality, not all unions are in agreement as Fausto Cereti said that Alitalia was its president from '96 to 2003: "The problem was that the ICFTU was favorable, while the CGIL considered the shares to employees a maneuver paternalistic "vallettiana" wanted a property to employees, the other wanted the master on the other side of the fence. So much so that the representative of the CGIL Cofferati ordered not to attend the two councils. " The CGIL
decides to leave the shares in the hands of the shareholder public today with the company's accounts in red are worth very little: more than 100 million lira fell to a few tens of euro.
For the first time in 1996 and then the public shareholders and that the Treasury of the Prodi government sells 37% stake in Alitalia. 21%, as mentioned, goes to employees, while another 15% is put on the market with an excellent result of scholarship: the privatization of Alitalia tying their employees gives the company confidence to investors. But soon these efforts will prove to be a wasted opportunity for state employees and the company.
Meanwhile in 1997, in the first phase of the plan, the accounts begin to return: the market capitalization goes from 600 to 6000 billion, Alitalia pay off debt for 3,000 billion and invests in the fleet for 2,500 billion. In the three years '97-'99 net earnings to reach almost one million dollars. The company is therefore substantially restored.
Europe hampers the recapitalization
Cempella According to the position Strategic Alitalia is difficult: too big to compete with small and too small for adults. For the CEO "development" means "change
size" and choose to become a global company.
Alitalia So far it was neither fish nor fowl, had no real direction as a manager and several short-lived, often with contradictory policies, prevented the company to choose its business and to be completely consistent bottom: on the one hand Roberto Schisano, CEO from '94 to '95, he had chosen in agreement with the shareholder a recovery plan that bet on low cost, and then the medium range, the President Renato Cowgirl in the two following years he worked the other hand, always agree with the shareholder, with a plan that focuses on long-range attempt an alliance (and failed) with British Airways. In '96
Cempella share estimate to $ 3 trillion needed to recapitalize. But since it is a public entity, the law provides that passes the examination by the European Community. In order to get the go ahead should the results of the plan, namely the profitability of the intervention of public action, is equal to the expected return from a private lender. That is, the state can recapitalize, re-energize economic your carrier, but as any private investor who expects a profit from financing in line with the market. He can not do so a grant. According
Cempella his plan meets the regulations, but at the end of the review process, the Community decided to give this the title of "State-compatible", meaning
putting the company for four or five years under protection prevented open new routes, buy new arerei and apply the best available rate on the same route.
For the For the Government had not done enough to avoid this decision: "The Italian State, the shareholder, agreed that" taxation " much more vigorous action when the government would probably have resulted in a different order. "
And in fact in those years, Air France and Iberia seek and obtain from the European Community to be able to recapitalize as finance market, despite their present business plan index premium (ie earnings) less than the plan that Cempella then approve an action by the Board of Directors "firmly convinced that the decision was unfair and unjust."
The appeal was won on December 12, 2000, but the company was too late. If so
as permitted by the European Community itself, not the reasons for rejection were in the business plan, where they were? The only answer that you give Fausto Cereti is tied to the interests that Europe itself was in Italy, especially in connection with "Malpensa 2000".
Malpensa Malpensa 2000
you start talking as early as '93 when the Council of Europe calls on member countries to develop links with Eastern Europe. Among the projects that Italy has to
"Malpensa 2000" for Europe to endorse in '94.
In December, the European Bank signs an agreement to provide to the SEA, the management company at the airports of Milan (owned City Council), more than 400 billion lire to be returned in 15 years.
is money intended to make a major hub of Malpensa, which is a provider of airport traffic, where the passengers find flights to all destinations, in competition with the Frankfurt and Paris. For Italy it is a great opportunity because a hub is an asset and a source of economic development. According to studies made by the Bocconi University in Milan, the airport would lead to node 150 thousand jobs and a value between direct and led 10 billion euro.
But to ensure the project calls for Europe to the Italian government together, and then rail and road accessibility. This will be one of the problems Malpensa, which will be a failure.
"I believe that Alitalia was initially skeptical of the hub - ENAC said the Director General from 1998 to 2003, Pierluigi Di Palma - So much so that calls to increase Alitalia's Malpensa slots on their own when was developing the project to expand the Malpensa! Everything changes when Prodi apparently goes to the government, because he was president of IRI and therefore has greater ability to convince the management Alitalia. On July 5, '96
Transport Minister Claudio Burlando issues a decree providing for the transfer from Linate to Malpensa, postponed to another date in order of all international and domestic flights, with passenger numbers exceeding 1,750,000 per year.
But foreign companies are concerned that the new hub is likely to steal traffic and then try to impede Malpensa 2000 and write to the Minister that the decree clearly favors the flag carrier. All are interested in having bases in Italy because it generates a lot of traffic so that for almost all foreign companies is the second largest after the internal movement. Not to mention the fact that the estimates give an increase in traffic in Italy 6%, three times that of other European countries.
The problems, however, are not only from abroad: some claim that the Lombard the distance of the railway on your area of \u200b\u200binterest is not flush but underground. This means much higher costs and implementation times are much longer than the commitments.
On 9 October '98, however, the Minister Burlando by a new decree fixing the date of opening of Malpensa 2000, to October 25. But that day the airport is not ready yet, missing links. The foreign companies and then declare, "we move to Malpensa links only when they are ready." And by a representative of Lufthansa, nine of them announced the action at the European Commission.
Who does not attend the press conference of a complaint against Italy Airfrance and KLM: the French and Dutch people want to maintain good relations with both the Italian government, which with Alitalia for its part to guard Malpensa desperately need a powerful foreign ally.
Alitalia needs an ally, it is in Cempella KLM
Domenico Cempella start negotiations with the Swiss, Dutch and French. Search Alitalia alliance does not pose in a weak position, but a partner to a union between equals, and who now answers this feature is KLM, as well as the same Cempella explains: "We start from a strong market presence in Italy and the absence in the Netherlands, the presence of a fleet in the Netherlands and the absence in Italy, were complementary in all business activities. "
KLM aircraft in fact more than they serve and their territories and seen their market have no chance of development, if not through a hub.
The agreement would lead to the creation of the largest European company: 39 million passengers, compared to 38 of Lufthansa, the 36's and 33's British Airway Airfrance, and 263 aircraft to 377 destinations, with revenues of over € 9 billion and considerable savings.
The master cooperation "was signed in '98 with the slogan" One ticket to the world ", with effect from 1 November of '99.
For the second time Alitalia in two years without the possibility of privatizing trauma, with an agreement that looks perfect. For the Dutch press Malpensa is a gift from God that justifies even an alliance called "risky". The Prodi government's plan, called "Project Hermes" is very simple: create two hubs, Fiumicino and Malpensa, managed by a company, created with the support of finance and Italian entrepreneurs, in which the government sells some of its actions Airports of Rome, Milan and the properties of the SEA.
But the government's plan must deal with many issues first and foremost the fact that the agreement with KLM is based around the new Meanwhile, Italian hub that fails to take off: if the first to protest against foreign Malpensa were only lines now also the SEA, the company that manages the airports of Milan, which calls before transferring flights are completed road works. With the SEA to protest, there are also 13 million passengers each year flock to Linate and especially the citizens of Milan used to quickly get to and from Linate Airport with 40,000 pounds of taxi against a train trip that would cost at least twice.
Losing the Malpensa 2000 project would be a blow for the country, and so in an open letter to Prodi tries to re-launch and March 25 '98 wrote in the Corriere della Sera, the mayor of Milan, Gabriele Albertini: "If we do not run for cover as soon as possible Malpensa will be condemned to a sure decline. Of all this I have spoken with the mayor of Milan, the answer I got was a stiff defense of a non-existent and indefensible primae Milan and Malpensa. In this way, the council of Milan Malpensa 2000 marks the sentence. "
Fausto Cereti explain and discuss the administration's stance of Lombardy: "It was the greed of the municipality of Milan to think that having two airports operating them would have sold at a higher price, which made him lose his head, and this depends by the fact that it is said that a person (Albertini) that was able to bring forward good factory 200 people are able to judge what happens in the air traffic .... "
plan fails the "Malpensa 2000"
On 21 October of '98 the Prodi government falls, it is now to govern Italy Massimo D'Alema, and the new Minister of Transport and Tiziano Treu.
Meanwhile, relations with Europe are more complicated: it granted the appeal of European companies about Malpensa and prompted the government to change the set of flights. On October 12, '99 Treu Minister reiterates the EU Commissioner Loyola de Palacio, the transfer will take place in accordance with the dates: 15 December '99 and December 15, 2000.
But to complicate matters plus the Minister for the Environment Edward Ronchi November 25, in agreement with that of cultural heritage, expresses a negative environmental impact assessment as
Malpensa is located in the Ticino Park. Therefore calls for a fresh examination of the program on the transfer of flights.
A month after Loyola de Palacio in a letter to the Minister Tiziano Treu reiterates doubts about Malpensa 2000 and calls to postpone the transfer of flights to make a precise analysis
impact and environmental measures.
This decision does not convince the President Fausto Cereti Alitalia: "We always call Europe to referee our internal affairs, but obviously if the arbitrator also tried to defend their own interests! Took advantage of a situation in which the lamb was being led by the pastor .... "
On 14 December '99, one day before the scheduled date of transfer, an agency ANSA says: "Tomorrow there will be the planned transfer of flights from Linate to Malpensa: the Minister has decided Treu agreement with the Prime Minister Massimo D'Alema.
It fails the agreement with KLM
The KLM decides to break the alliance 20 April 2000 for this reason: lack of development of Malpensa and lack of development of the Italian carrier. The Dutch company prefer to pay a penalty of 250 million euro provided that the door closer to failure, rather than being tied to Alitalia. Cempella for the failure of his project is a huge blow, "When that famous night, the Prime Minister said," you go to die "- after I came from a year of suffering almost daily having to convince the Dutch from time to time below to come to me - at that time began to realize that tying their fate by merging with an airline where the government was certainly not a friend of Alitalia, it was not what to do. It was the straw that broke the camel's back. For me, I resigned on December 13, 2000.
Alitalia is then to have to split itself in three leading airports, Malpensa, Linate and Fiumicino. This means: triple fleet maintenance triple, triple staff and hence costs triple.
After September 11 After September 11, passenger traffic worldwide suffer a significant decline. Alitalia is forced to cut international flights, international and national. But the losses continue to climb past the 500 billion lire.
Instead of Domenico Cempella is called Francesco Mengozzi. His plan includes cuts for 41% of the intercontinental sector, but the stewards for Alitalia is a grave error: "Delete the route to Beijing with a 80% coefficient filling and with a growing market was absurd. "
Amid the current Alitalia therefore take hasty decisions and wrong choice: focus on medium-haul and then compete with low cost impossible, when all the other companies give priority to the long-haul flights where the philosophy does not reward. The losses increase again in 2003 while global traffic suffers another fall and falling by 7.1%.
Alitalia reacts with new cuts and this time the expense is the airline personnel. Yet according to data from the AEA (Association of European Airlines) is the staff the truth (or at least the only one) of the problem. Nell'Yearbook 2007 states that between the main European airlines Alitalia has the lowest ratio of employees and aircraft in service: 61.45 employees per aircraft (rising to 99.94 if you add Alitalia Servizi), 246.53 against Air France KLM, the 158 , 31 of British Airways, Iberia, 159.34 and 232.21 of Lufthansa. Same goes for salaries: an Italian commander Boeing earns about € 8 thousand per month, 30% less than the European competition: 14 thousand British, 12 Iberia, 11,500 Lufthansa. It also says that the coefficient of work divided among the members is among the highest.
The only negative about the salaries of managers, among the highest in Europe. The real question then is Alitalia's mismanagement.
Personnel costs in Italy and then no more than 20% against 26% of other European airlines, but the cuts are made equally. On June 1, 2003 and then the staff on strike suddenly against the decision to reduce from four to three members on the Boeing and the blockade of overtime and holiday backward: in one day are canceled 250 flights, and only 1,300 out of 2,000 employees engaged in the service . The business plan
2003
In this emergency situation, the CEO Francesco Mengozzi asks for help to the American Glen Hauenstein, author of the rescue of Continental, which now states: "Surely the biggest problem was the property of the company. When I ask because here in Amerca Alitalia does not take off I say, "Imagine the U.S. government who runs an airline," The Italian State has had countless opportunities to get out of Alitalia, but in the end has always chosen to take control of the company " . In this regard
Fausto Cereti made the following diversification between Italy and the rest of Europe: "The difference is that while foreign companies are run by government in a discreet way, through real powers to management, we not be holding the State means the company must be serve the interests of the state, but the company must serve the interests of political forces. " The
October 30, 2003 at Palazzo Chigi Mengozzi presents the business plan 2004-06, which are the most common terms are "change" and "privatization", which provides for a recapitalization first and then the drastic reduction of the property that the Treasury must be reduced by 62% 50%.
In 2003, Alitalia and Air France are the only airlines to still be controlled by the state, but in April the French government announced: "privatized by the year and then married KLM.
On November 13 Prime Minister's office also announced that it has unlocked the privatization of Alitalia, although it does not say how or when. Against this announcement on November 28 in Alitalia strikes there are new: all unions are united against the privatization.
The Berlusconi government at this point is turn around, as Glen Hauenstein said: "They bowed to pressure from trade unions, did not want to take the road more difficult but in the long run would prove to be the fairest. Trying to implement the things following the daily whims of politics can never be a key to success.
in any type of financial activity. "
With Giancarlo Cimoli, Alitalia is increasingly in red
On May 6, 2003 Giancarlo Cimoli as the shareholder appoints new CEO, president and CEO. The company claims 1 million loss per day and the new business plan Cimoli approved by the Board of Directors September 20, 2004 once again provides new cuts.
On 8 October 2004, the Treasury acts as guarantor for a bridging loan of 400 million Euros needed to save the company, while on 11 November, the Council of Ministers approved a new scheme of
decree for the privatization of Alitalia, which authorizes the Treasury to come down from 62% to 49.7%.
Meanwhile, Alitalia loses flights to Sardinia for having "forgotten" to submit the documentation to participate in the tender. The slots on Sardinia are then taken by Meridiana and Air One.
debt the company continues to grow and is on the brink of bankruptcy. While the growing controversy about the salaries of managers of state-controlled companies: in 2005 a resolution of the Board of Directors, for example, doubled the salary of Giancarlo Cimoli rising to € 2,791,000 per year (6 times the CEO of Air France and three times that of British Airways). These gave way in 2006 first and then Berardino Libonati Maurizio Prato, and calls for 8 million euro severance pay.
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Albert Einstein: "I know only one race, the human
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