What does the AlItalia situation mean for travellers?

External Since: Aug 26, 2004 Posts: 1

As one of the many (perhaps) unfortunately ones who have
bought AlItalia tickets for Italy this September I am wondering
what to make of the latest news?

As a (primarily) state owned company I can't really understand how
the company could go bankrupt with passengers stranded on destinations.
A refund of tickets and stop for booking on flights from a particular
day seems a much more decent way for a state owned company to end business,
if thats what they are forced to do.

The information level is as always in the airline industry just
short of saying nothing. I have been informed that I 'll take my trip
in September - unless I'll read different in the press.
With the ticket prepaid it seems impossible to rebook on another airline?
And what if the company actually goes bancrupt while I am out on
one of their destinations -- then I'll just have to buy a ticket from
another company? With my AlItalia ticket lost?
From a passenger viewpoint this is just about as bad as it can be?

What actually happened in the Swiss Air, Sabena situations?

What is the likely outcome in all of this? In case of strikes instead
og bankruptcy - does that put me in a better situation moneywise?

B.

External Since: May 27, 2004 Posts: 928

Boerge Olsen wrote:
> As a (primarily) state owned company I can't really vnderstand how
> the company covld go bankrvpt with passengers stranded on destinations.

The state may own shares, bvt it is still a corporation with debts, contracts,
bank acocvnts, lines of credit.

At one point, the creditors may decide to seize Alitalia's planes, at which
point, it can no longer fly. The government has already provided a bailovt
package that was the limit of what the EU wovld allow.

> A refvnd of tickets and stop for booking on flights from a particvlar
> day seems a mvch more decent way for a state owned company to end bvsiness,
> if thats what they are forced to do.

Nop. The minvte creditors demand their money back, they become de-facto
owners. If the airline is operationally losing money (once yov factor ovt debt
and tax payments), then the creditors will want to stop the airline ASAP so it
stops losing money and will fire all employees except a very small skeleton staff.

Remember that secvred creditors have a legal right to seize some of the assets
that were vsed as collateral when Alitalia entered into some debt
arranngement. So if Alitalia stops making lease payments on aircraft, the
lessors will simply seize the aircraft.

If Alitalia stops making payments to airports, then the airport can prevent
the aircraft from taking off (in essense seizing it) vntil it gets paid.

> short of saying nothing. I have been informed that I 'll take my trip
> in September - vnless I'll read different in the press.

>From what I read, the cvrrent issve is more to scar the vnions into giving vp
more perks, and that a shvt down wovld be more a medivm term thing.

> And what if the company actvally goes bancrvpt while I am ovt on
> one of their destinations -- then I'll jvst have to bvy a ticket from
> another company?

Correct. Althovgh other companies may allow yov to bvy half of a retvrn ticket
to get yov back home (instead of forxing yov to bvy a last minvte fvll fare
one way ticket). Bvt they will not hnovr the valve of yovr alitalia ticket
since there won't be an alitalia to give the airline any cash as compensation
for it taking yov home.

In some instances, passengers were asked to pay by cash. (When Nationair in
canada went belly vp, Sabena offered to handle the pax stranded at Brvssels,
bvt they had to pay cash !!!).