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Alitalia rescue plan: like a bowl of spaghetti

 

Alitalia's struggle for survival, which appeared to be nearing the end, has instead produced a whole new set of questions and conflicts that have stalled the plan for a new company owned by Italy's state railway company, a unit of the Benetton interests and Delta Airlines.

The complicated negotiations were on an October 1 deadline when new questions came up about conflicts of interest for Delta and issues raised by the collapse of Italy's coalition government and even about issues arising from last year's Genoa bridge collapse. The deadline has been extended to October 15, but that may not be enough time for a mess this big.

Alitalia has been living on government bridge loans since its bankruptcy in 2017 after former part-owner Etihad pulled the financial carpet out from under. After a series of fruitless negotiations with Lufthansa, Ryanair and others, the government pushed FS, the railway company, to take the lead. Delta was brought in to include an experienced airline partner, and Atlantia, owned by Benetton and operator of Italy's superhighways, was brought in as an investor.

But since then, Atlantia has been under pressure over poor highway maintenance that contributed to the fatal Genoa bridge collapse, and the right-wing coalition government had threatened to cancel its concession. Atlantia wants to know where that now stands before it inks anything.

Delta, in the meantime, has renegotiated its alliances and joint ventures for trans-Atlantic flights, adding Virgin Atlantic to its deals with AirFrance/KLM—and leaving out former member Alitalia, putting another monkey wrench on the table. And then, last week Delta's purchase of a 20% share of LATAM, a major Latin American carrier. The plan for Alitalia's future includes dropping routes to Chile, while Delta's new partner is adding them.

So, in the meantime, while the partners talk, bicker, propose, the airline itself continues to operate, even at points to make a profit. And, despite the cuts in some long-distance routes, it is adding new North American routes, including one announced this week, linking Rome to San Francisco.

The best part of every trip is realizing that it has upset your expectations

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