Monday, June 28, 2010

Alitalia Airlines

By Tom Martens

Headquartered in Rome, the eternal city, Alitalia is the nineteenth largest airline in the world, with its main hub at Rome's Leonardo da Vinci-Fiumicino Airport. Alitalia serves 66 international and 24 domestic destinations, its top 12 flights all originating from Rome. Alitalia offers a frequent flier program MileMiglia, qualifying fliers for all the benefits of the Sky Team Alliance. Members of MileMiglia can earn miles on flights on Alitalia or any of its thirteen Sky Team partners, including Air France, Delta, Northwest, Aeroflot, Korean Airlines, Czech Airlines, and more.

Alitalia's first domestic flight was in'46, from Turin to Catania and then to Rome. Alitalia's maiden international flight took place in'47 with a flight from Milan to South American. Its present fleet consists primarily of Airbus and Boeing aircraft, as the company makes strategic changes to expand its presence in the international market.

Alitalia Airlines has struggled financially for decades, with numerous takeover and merger attempts occurring in recent years. Its financial difficulties can be tied to problems with pilots and crew members, labor issues and government interference. Alitalia Airlines has only recorded one profitable year,'98, since it was founded over 60 years ago. The Italian government stopped investing money into the airline in 2006 on the orders of the European Union. The airline went bankrupt in 2008. Alitalia Airlines became a private company in January 2009 when Air France-KLM bought a 25 percent stake in the airline, and the Italian government agreed to lower its stake in the airline.

The newly privatized Alitalia then merged with Air One under a corporate consortium called Compagnia Aerea Italiana (CAI), which finalized its acquisition of the two airlines in late 2008. The new Air One operates frequent flights to 36 destinations in Europe and also to North America, flying from Rome, Milan, and Turin.

Italian Prime Minister Silvio Berlusconi called for the creation of the consortium, which consists of major Italian entrepreneurs and financial institutions. Under the terms of the agreement, the consortium assumes responsibility for Alitalia?s debts. The consortium was very controversial, with opponents claiming the airline?s sale was subsidized by taxpayers. The deal was worth one billion euros. The new owners have a five year plan they say will restore the new airline to profitability in 2010. Over 12,000 Alitalia workers were kept in the merger, while another 3,250 jobs were eliminated.

CAI officials hope that the 25 per cent stake held by Air France-KLM will enable the new company to expand its coverage of international destinations that will bring the company into the black. But Alitalia's problems created a great deal for the flying public, as all tickets were honored and the new participation in Sky Team greatly enhances opportunities to earn and use frequent flier points from MileMiglia.

One well-known service of Alitalia has been continued by Air One. The airline continues to charter "Shepherd One," the official airline for the Pope. Alitalia continues to provide charters for a well-known jet nicknamed "Shepherd One," used by the Holy Father whenever he leaves the Vatican on flights around the world. The new consortium is expected to continue to provide Shepherd One.

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