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2 May 2017

Arrivederci Alitalia!

Lisa Wright

It would appear that the inevitable has finally happened, with the announcement by Alitalia's board, after a shareholder meeting held today, that they have formally requested that the company be placed into administration and either sold or liquidated.

For Alitalia this has been a long time in the making, with Italy's flag-carrying airline showing a reversal in its fortunes after Etihad acquired a 49 per cent stake in December 2014. Having been privatised by the Italian government in December 2008, the company has subsequently been linked with a number of airlines, including fellow Sky Team members Air France and KLM, and non-Sky Team airlines such as Ryanair and Emirates. However, Alitalia's legacy cost base and heavily unionised work force from its days of being a government-run national flag-carrier have left it unable to negotiate substantial cost reductions and redundancies. Add into the mix the continued rise of the low-cost budget airlines flying into Rome, its main hub, and the writing really was on the wall.

At this point there doesn't seem to be a clear view as to whether a sale will be achieved or whether the company will be liquidated, but given the company lost its CEO, Silvano Cassano, for personal reasons a few months after Etihad's acquisition and attempted turnaround plan and now just over two years later Etihad appears to be throwing in the towel, I don't personally see it. That said, if the right concessions could be agreed it wouldn't surprise me if Michael O'Leary of Ryanair appeared from somewhere to influence the outcome of Alitalia.

LIsa Wright

Lisa Wright, Managing Director, M&A products

A regular blogger on this site, Lisa shares her analysis and opinion on news and trends in M&A, private equity, venture capital and IPOs.

A regular blogger on this site, Lisa shares her analysis and opinion on news and trends in M&A, private equity, venture capital and IPOs.

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