Summary report of Alitalia's dramatic crisis (2009)

Résumé du document

Alitalia is the flag carrier airline of Italy. The company was founded in 1947. At that time, it was owned by the Italian Ministry of the Treasury with 49% of shares and other shareholders, including employees with 49%, and Air-France KLM with 2%. Alitalia knew its apogee in the 1960s, and has long suffered from political interference, trade unions interest and, more recently, from soaring fuel costs and an economic downturn stinging the travel sector worldwide. The deregulation of the 1970s was rugged for the company. Alitalia failed at trying to diversify its activities in the tourism field and had to reduce its operations drastically. In 1996, the company limited its services to flyers services. The events of September 11, 2001 worsened the situation of the company by reducing the market demand. In 2006, the crisis was accentuated with a 10% loss of its value on the stock exchange.

Extraits

[...] During all the first trimester 2008, Air France represented by Jean- Cyril Spinetta negotiated with the Prodi government and the company‘s trade unions. One day before the Italian elections, the trade unions ‘demands dragged on the repurchase of Alitalia. Corporate governance Critical decisions for the two last weeks Alitalia is about to lose its flying license and may have the interdiction of flying. This decision is due to its dramatic situation. Besides, the company and the government have difficulties finding out an efficient rescue plan. Indeed, every day the company calls and has new bids. [...]

[...] Summary report of Alitalia's dramatic crisis (2009) Presentation of Alitalia Alitalia is the flag carrier airline of Italy. This company was created in 1947. At this time it was owned by the Italian Ministry of the Treasury other shareholders, including employees and Air- France KLM Alitalia knew its apogee in the 60's, then, it has long suffered from political interference, trade unions interest and, more recently, from soaring fuel costs and an economic downturn stinging the travel sector worldwide. Unrealistic expectations The deregulation of the 70's was rugged for the company. [...]

[...] Regulators The role of regulator is particularly interesting in this case. Indeed, the Italian government is deeply involved in the rescue of the company. During his campaign Berlusconi uses Alitia issues, to convice voters. Berlusconi always stayed on his position and do not want a foreign bid. He wants to keep Alitalia as an Italian company airline. The government gave billion of euro illegally to the company, but it did not have the impact wanted and did not save Alitalia. [...]

[...] The internal side effects are the organization's problems and the unstable corporate governance. The third reason is a lack of information. Control Alitalia needs to control some important points to value its image. There are established standards like the punctuality, security, reliability, organization and financial stability. To measure their performance they can use quantitative measures (such as full flights, number of reservations, etc.), or look at the financial reports, the number of crashes, and the clients' satisfaction. These measures will show if the objectives of the company are achieved. [...]

[...] Political influences on the company - Elections of 2008 - The future of the company depends of the elections and the trade unions: loss of control! Information Some information collected: Compulsory information In the Web site www.alitalia.com we can find some compulsory information as the annual report of 2006 and 2007 in which there is the Board of Directors, data of the group. Voluntary information We are hearing a lot about Alitalia because of its dramatic situation. Today, its image is devalued. Information quantitative: Foundation: 1946, Fleet size: 181, Destinations: 18 3,250 job cuts and downgrades in contracts, (pilots and cabin crew). [...]