Alitalia going Bankrupt?

As always happens, the Italian state will almost certainly underwrite the losses. Hell, Olympic and SN Brussels (formerly Sabena) are both much worse run and they keep getting bailed out.

Alitalia's Future is In Doubt is the headline in today's WSJ. The article is not encouraging for Alitalia's future. Obviously one should avoid buying tickets on Alitalia and if you hold tickets then you need a good travel insurance policy that covers airline collapses. Don't assume your policy covers this situation. A few years ago, a cruise line went under and most travel policies did not pay because it was not a specified risk. Do your homework.

I thought they were going to be bought our or "merged" with another airline - like KLM.

The merger talk collapsed yesterday because the Italian unions would not yield on some key points and the Chairman of Alitalia resigned today. The end maybe very near.

Now the Italian government and the unions want Air Franc-KLM to come back to the negotiating table...sounds like they're scared, since the only other option seems to be bankruptcy, and who knows what will emerge from that. Don't forget, the Italian government owns 49% of the airline, so it's doubtful it would disappear altogether.

The WSJ reported that the government has been trying to sell it 49%. with no takers. They may not be a strong commitment to maintaining the airline.

The EU has threatened to heavily fine both Altalia and the Italian government if it doesn't stop subsidizing the airline; it's a catch 22. Olympic Airlines is in the same situation, the Greek government has announced that if private investors don't buy the assets by the end of the year, it will cease operations. Ryan Air has filed suit to expedite this process. SN Brussels is a private airline, it was purchased by Virgin Express last year.