In the past year, Alitalia has faced bankruptcy multiple times. Last March, Alitalia announced a restructuring plan given how much money the airline was losing. Employees, however, voted against this plan given that they didn’t want layoffs or pay cuts to go into effect.

While Etihad previously had a 49% stake in the struggling Italian airline, the Dubai-based decided to withdraw support after concluding that the airline wouldn’t ever become profitable. This was around the same time that Etihad reevaluated their entire partner strategy.

So, the Italian government gave Alitalia a loan while trying to find buyers for the airline. They have so far had no luck finding a buyer for the airline.

The Italian government said they’d provide a temporary loan and promised they wouldn’t keep funding Alitalia, though they have continued to provide loans for the airline.

The Italian government is now proposing that they renationalize Alitalia by taking a 51% stake in the struggling carrier. The move would make Alitalia a flagship of “Italo character.” The proposal is that the government would take a majority stake while a new private partner would take over the rest of the airline.

Italy’s Minister of Infrastructure and Transport, Danilo Toninelli, said, “We will bring the company under the national flag, with 51% in Italy and with a partner that makes it fly.”

“We wrote it clearly in the government contract and now we are following exactly that road: neither rescue, nor survival, but a re-launch within a strategic transport plan that makes Alitalia a competitive national carrier,” said Luigi Di Maio, the Italian Minister of Labour and Industry. “I don’t want to talk about partners. We will save Alitalia keeping her Italian.” He said he will work to assure a future to Alitalia and he will examine the current economic situation to identify the problems responsible for Alitalia’s struggles.

Airlines like Lufthansa and easyJet are still interested in purchasing part of Alitalia despite the Italian government’s plans for nationalizing the carrier.

“A strong investor next to [Alitalia will help it] return to being a true flag carrier,” said Tonielli.

What makes the timing of this especially interesting is that Air Italy is currently growing like crazy and wants to become Italy’s new “national airline.” This comes after Qatar Airways bought a 49% stake in the airline. Qatar plans to lease 30 Boeing 787s to Air Italy and already leases three Airbus A330s the Italian airline. Through the coming years, therefore, Air Italy will have a longhaul fleet that is larger than Alitalia’s.

Milan Malpensa is becoming a hub for Air Italy. In 2022, Air Italy plans to carry 10 million passengers, 8 million of which will fly through Malpensa. The airline’s fleet will consist of 30 widebodies and 20 737s Max 8 aircraft.

“We don’t want to walk near Alitalia, we want to substitute for her,” said Qatar CEO Akbar Al Baker.

Featured image by Davide Olivati via Wikimedia Commons