Alitalia, the national flag airline of Italy, reported a net loss for 2015 of €199 million. That was down from a loss of €580 million in 2014, as the SkyTeam alliance member confirmed its turn around is still on track. Alitalia plans to return to profitability by 2017, as it works to execute the company’s three year turnaround plan. Alitalia reported total revenue for 2015 of €3.3 billion, and an average flight load factor of 76.2% for the fiscal year. The company is focusing on efforts to improve its service, update its aircraft fleet and route networks, and reduce operating losses.
Alitalia still facing headwinds in its restructuring
Alitalia is still facing some very considerable headwinds as it seeks a return to profitability. There was a fire that broke out at the Rome Fiumicino International Airport on May 7, 2015. This fire caused major damage to the facilities, and caused severe disruptions in operations that are estimated to have cost the airline €80 million. This fire also resulted in my wife and I almost missing our Lufthansa flight from Rome to Munich on the 11th of May. Our flights departure was relocated to Terminal 2 from Terminal 3, where the Lufthansa ticket counter was located. It also appeared that the agents at the ticket counter were engaged in a work slow down. The line hardly moved until about 15 minutes before the scheduled departure time. Then, they rushed us all through, telling us we now had to go out and over to the other terminal to catch our flight. Some other issues that Alitalia has faced included the suspension of their route between Rome and Caracas. The airline pulled the plug on that route as a result of the Venezuelan government’s refusal to allow the repatriation of foreign currency from their country. They also suffered decreased load factors on their Paris routes following the terrorist attacks on the “City of Lights”.
There are positives that Alitalia reported. These include rising revenue from the airlines codeshare partnerships. The biggest of these partners is Etihad Airways of Abu Dhabi. The two carriers shared more than 450,000 passengers between their two networks in the last fiscal year. Etihad Airways bought a 49% stake in Alitalia in 2014 for €387.5 million. Another big partner for the Italian air carrier is Air Berlin. Those two carriers are working to improve their network connections across Austria, Germany, Italy, and Switzerland. On time performance also rose to 80.2%, and the airlines share of the Italian air travel market rose to 30%.
1 Euro = 1.16 US Dollar
