Perennially-troubled Italian flagship airline Alitalia would soar again under state ownership, backed by €3 billion of government funding, and leave SkyTeam for the arms of Star Alliance, according to reports.
The long-ailing carrier will be nationalised from June 2020 and "focus strongly on long-haul routes, also with new transatlantic alliances,” Industry Minister Stefano Patuanelli said on Thursday.
The government is also considering switching Alitalia’s partnership to Lufthansa and Star Alliance, abandoning a current tie-up with Delta Air Lines and SkyTeam, newspaper Il Sole 24 Ore reported.
Star Alliance's transatlantic joint venture currently includes Air Canada, Lufthansa Group airlines and United Airlines.
Patuanelli has said "the new Alitalia will start with a fleet of more than 90 aircraft compared with its current 113 airplanes," but stressed the €3 billion injection was "not another rescue. This is the company's relaunch."
Alitalia has received more than €7 billion from the Italian state over the last decade, along with a €560 million investment from Etihad Airways which saw the Gulf carrier take a 49% stake in the airline.
It had already struggled through three failed restructuring attempts over the past decade, and has been run by state-appointed administrators since May 2017 when it entered bankruptcy protection, facing US$3.3 billion of debt.
Italy, the Euro area’s third-biggest economy, has been under a national lockdown since early March to counter the spread of the coronavirus. Flight cancellations across Europe have badly hurt airlines as revenue craters.
Patuanelli said that as a nationalised state-backed airline, Alitalia "will kick off in the same position as other airlines once the sector restarts."
Additional material by Bloomberg News
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