Italian airline Alitalia disappears after 75 years of existence

After 75 years of existence, Alitalia this week joined the long list of large defunct companies, along with Pan Am, or TWA, in the United States, Sabena or Swissair in Europe. Thursday, October 14, shortly after 11 p.m., Alitalia’s last flight from Cagliari landed at Rome Fiumicino airport, definitively sealing a story that began in 1946.

At the time, Italy felt itself growing wings and its dream full of pride, as the Roman press underlines had for name Alitalia, the wings of Italy. In the early 1960s, Alitalia experienced the euphoria of the economic miracle, then ranked the seventh company in the world, unthinkable today ahead of Lufthansa.

Then with the opening up to competition, Alitalia gradually began its long descent into hell. Where other companies have started to forge alliances, by investing and seeking capital, Alitalia has retained the dogma of state management. As a result, it has developed three times slower than its European rivals.

Several other strategic mistakes were made. First, the company has long focused its activity on short and medium-haul flights, to the detriment of the much more profitable long haul. A losing strategy, with the arrival of the first low-cost companies in Europe at the end of the 1980s.

Alitalia has also put a lot of emphasis on the Rome-Milan line, yet competed with the high-speed train in less than three hours. Finally, last point, it has long retained a two-headed organization with two poles in Milan-Linate and Rome Fiuminico. Partially privatized in 1996 by the first Prodi government, all attempts to sell or merge with Air France-KLM or Etihad have failed.

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ITA (Italia Trasporto Aereo) took off last Friday. But it is much more modest with a fleet reduced by half to around fifty planes. It bought the Alitalia brand for 90 million euros instead of the 290 million requested, it will keep the logo design but not the brand.

This disappearance of Alitalia shows once again that even “historic” companies are deadly. And it questions the need for traditional companies, “legacy”, to rethink their economic models and their employees not to believe themselves safe, even if the State promises to bail out their losses.

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