Alitalia’s bidders: Lufthansa, easyJet & Cerberus; workforce, restructuring, politics all critical

The commissioners of the Italian airline’s administration and the Italian government are considering three offers for Alitalia from Lufthansa, the US private equity firm Cerberus, and easyJet (Air France-KLM denied any involvement in the process, following reports that it had bid jointly with easyJet).

The restructuring plan adopted by Alitalia in Mar-2017 included growth in the more profitable long haul network and a reworking and reduction of short haul in an attempt to make the airline more competitive with LCCs.

The plan was rejected by employees, who did not like the headcount reductions and labour cost saving targets, causing Alitalia to enter administration in May-2017. However, in administration, Alitalia has continued to grow its long haul network.

The balance between long haul and short haul is a critical issue to the bidders for Alitalia, with each having a different focus. Cultural change, restructuring and the end of political interference will also be crucial – but, as Alitalia’s unions have demonstrated many times, difficult to achieve.

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