New international airline Alitalia to fly out of Italy Friday

Italy on Friday introduced its new national airline, Alitalia, after its prospective owner, Air France-KLM, pulled out. Italian Prime Minister Giuseppe Conte said new board members had met and approved the most important part…

New international airline Alitalia to fly out of Italy Friday

Italy on Friday introduced its new national airline, Alitalia, after its prospective owner, Air France-KLM, pulled out.

Italian Prime Minister Giuseppe Conte said new board members had met and approved the most important part of Alitalia’s operations: 400 aircraft and 1,000 pilots.

Alitalia unveiled its fleet at a ceremony attended by dozens of Italian politicians and business leaders.

Italian businessman Leonardo Del Vecchio, chairman of German luxury watchmaker LVMH and electronics giant Richemont, said Alitalia must be profitable from the outset and the money needed is massive.

Del Vecchio, who is also a minority shareholder in Air France-KLM, is the CEO of Alitalia’s investor group, Groupe Air France-KLM also known as AIK.

He has said he was willing to invest tens of millions of euros to keep the airline running through 2019 and would take a 25 percent stake in AIK and 25 percent of Alitalia.

“We will seize this opportunity to work quickly and launch a project that will restore the positive image that Alitalia has lost,” Del Vecchio said.

Del Vecchio is on a list of experts who have signed an “interest letter” in investing in Alitalia, alongside Italy’s largest insurer, Assicurazioni Generali, utility Enel, and an infrastructure funds associated with Abu Dhabi and China.

Talks are still under way with Chinese aviation company HNA Aviation about taking a minority stake in Alitalia, but Del Vecchio was coy on the topic, saying no details of the deal had been worked out yet.

In a presentation that opened the company’s headquarters in Venice, Del Vecchio said the issue of restructuring Alitalia’s debts would be another matter that would be dealt with by the consortium.

Alitalia, which was founded by the former prime minister and Italy’s current economy minister, Paolo Gentiloni, served around 40 million passengers last year but faces stiff competition from cheap carriers.

One thing of great importance for Alitalia is its strategically important hub in Rome’s Fiumicino airport, but after Air France-KLM pulled out, Italian government officials said that Rome had to find a buyer that still wanted to keep the airline operating.

Late last year, Air France-KLM said it was backing out of the deal.

“One thing is to see it and another to walk away from it,” said Gentiloni, who was Air France-KLM’s CEO for nine years.

The roots of Alitalia date back to the 1950s, when Emittis Air Cittadella established a local branch after acquiring the Laudamotion airline from Alitalia founder Alberto Laudamia.

But while Italian airlines, like their European peers, focused on cheap fares and routes to Europe, Alitalia offered more luxury and service options.

Indeed, Laudamotion was a distant second in a series of polls taken over the last 30 years by the Italian consumer confidence organization Confcommercio about who Italians view as the best airline.

The largest segment of the public ranked Alitalia far below Air France and Lufthansa, and far ahead of Korean Air and the British Airways.

Alitalia came to serve about 40 million passengers per year, although between 2000 and 2014, flights from Rome to its then-home base of Marseille dropped 40 percent, from 3,316 to 1,836 a year.

The low-cost carriers came after Air France-KLM acquired Aer Lingus in 2008, as did low-cost upstarts Ryanair and EasyJet.

Investors have been trying to get Alitalia off the government’s hands for years, often at higher costs than the 12.5 million euros ($14.4 million) that had been paying the Italian Treasury annually on its bailout package.

But the government rejected the previous pair of takeovers bids, arguing that there should be a guardian in Italy’s national airline for national interests and not go abroad.

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Follow Ardo Tanazhil at: https://twitter.com/ardo.tanazhil

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