Is Ryanair about to become involved in the rescue of former Italian state carrier, Alitalia?
The answer is probably not, but the intriguing concept was aired in Rome this week when Ryanair chief executive Michael O’Leary said that, if Ryanair were asked to join Alitalia’s current, crisis-driven €300 million capital increase, then his company “would evaluate” it.
Alitalia has long been a notorious financial disaster, having returned an annual profit only four times since its foundation in 1946. The now-privatised company is currently losing more than €700,000 per day whilst its net debt is approximately €1 billion.
Furthermore, the company’s main shareholder Air France-KLM, which has a 25 per cent holding, threw a large spanner into the works last week when it declined to take part in the €300 million recapitalisation plan.
Alitalia has so far raised just two-thirds of the capital wanted from the share sale. It may now have to rely on other investors, principally Italy’s state postal service, Le Poste Italiane, to provide the rest.
In October, Le Poste agreed to invest €75 million in Alitalia in return for a 15 per cent shareholding, a “dig-out” arrangement which immediately prompted accusations of “illegal aid” from British Airways.
Offer rejected
In Rome this week to launch Ryanair's first-ever flights out of the Eternal City's major international airport, Fiumicino, Ryanair's O'Leary was careful not to dismiss the idea that his airline might, in some way, become involved with Alitalia.
Last week, Ryanair offered Alitalia a commercial collaboration but the offer was rejected by Alitalia which claimed to be working “on strategy for our own industrial plan”.
Last night, Alitalia spokespersons were not available for comment but Ryanair stated: “Ryanair has requested a meeting with Alitalia to examine any other opportunities which may exist for co-operating with and assisting Alitalia in its current restructuring.”
O’Leary said that, despite all its problems, Alitalia could still be turned around, telling reporters: “Seen from outside, you get the impression that . . . Alitalia’s problems are the result of too much political interference, of reluctance on the part of workers to accept changes in the airline industry and of too many loss-making, short and medium haul routes . . .
“On top of that, Alitalia has too many expensively leased aircraft, too many planes and too many types of planes”.
O’Leary also said that the current recapitalisation will provide only short term financial solutions, adding: “Alitalia can still pull through . . . if work methods change and if the Alitalia fleet is radically overhauled”.
Ryanair last week announced the opening of a new base at Fiumicino, with an initial six aircraft flying five new routes – Barcelona and Brussels internationally as well as domestic flights to Catania, Lamezia Terme and Palmero.