Monday, May 1, 2017

Alitalia's insolvency

Alitalia, a flagship airline company in Italy, is going to be bankrupted.

In Recent years, Alitalia was suffering from a shortage of money. Also, its reputation has fallen because of a mass theft scandal. The other day, Air France planned to buy the company. But its acquisition was canceled mainly due to the resistance of the employees.

My past entry: Accidental airplanes

My past entry: Baggage theft cases in Alitalia

And now, recapitalization is still almost impossible because it requires a significant cut of salary. It seems unavoidable that Alitalia will proceed to an insolvency state.

International Business Times: Alitalia goes bust: Italy's flagship airline triggers insolvency process as liquidation looms

At a glance, the failure of Alitalia is attributable to the employees' attitude, as they repeatedly rejected bailout programs suggested so far. Also in Japan, employees of Japan Airline strongly opposed to salary cut when it was in peril of bankrupt.

It is quite natural that employees prioritize the amount of  their salary per work. On the other hand, if Alitalia becomes unavailable, it is predictable that the number of tourists visiting Italy will seriously drop. It may be critical for Italy itself, considering that tourism is one of the main source of gaining foreign money.

After all, this is an issue of public goods. Privatization of a flagship airline is a double-bladed saber.

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