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Monday, September 26, 2022

“New Alitalia” Set To Obtain AOC, Begin Ticket Sales

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It’s possible that Alitalia’s time has come to an end.

The new state-owned company established by the Italian government to replace the chronically losing Alitalia is taking shape and is on course to acquire its Air Operator’s Certificate (AOC) this week, allowing it to activate the website and begin selling tickets.

The “changeover date” between the old Alitalia and the new ITA (Italia Trasporto Aereo) was set for October 15 by the Italian government in collaboration with the European Commission, which is overseeing the process to ensure that everything is done in accordance with E.U. legislation prohibiting state aid.

However, Alitalia is currently selling tickets even after the formal date of its collapse because ITA is not yet a legal airline and hence cannot sell tickets.

According to the Italian newspaper Corriere della Sera, the government has set aside 100 million Euros ($118 million) to allow Alitalia to pay all tickets issued for flights that will not be operated: there will be 255,000 passengers who will need to be reimbursed.

Two previously owned Alitalia aircraft, an Airbus A320 and an Airbus A330, have already been transferred to ITA and have flown a test flight under the new ownership. This is a required step in order for the Italian regulator ENAC (Ente Nazionale Aviazione Civile) to grant ITA the AOC.

A temporary website, with limited functionality to begin with, is already being built to ensure that ITA can go on sale as soon as the AOC arrives. Simultaneously, Alitalia will begin canceling flights that will not be operated after October 15, and will gradually phase out its operations.

Purchase of assets is still pending.

Following that, ITA will concentrate on completing the purchase of the aviation unit from Alitalia, as well as preparing to participate in the public tender for the purchase of other assets that were excluded from the private sale due to the European Union’s intervention.

ITA will have to bid for Alitalia’s handling and maintenance units, as well as submit a competitive offer to obtain the Alitalia brand, as well as its IATA callsign (AZ) and ticketing accounting code (055).

The MilleMiglia frequent flyer program will not be part of the asset transfer and will not be pursued by ITA, which has already announced the introduction of a totally new, modern frequent flyer program in the near future.

The new program would most likely offer a “status match” to existing MilleMiglia premium subscribers, although it is unclear what will happen to those customers’ miles.

Unredeemed frequent flyer miles are technically part of an airline’s liabilities on its balance sheet, and since Alitalia will be declared bankrupt once the asset transfer is completed, those miles are likely to be written off as customers are considered unsecured creditors of a company in liquidation.

However, considering the sensitivity of the problem, it is probable that a solution will be found to prevent the consumers from losing all miles.

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