Thu, 16 March 2017

Alitalia’s Board Approves Turnaround Plan

Alitalia’s Board of Directors has approved the airline’s turnaround business plan which includes a range of radical measures across the whole of the company to stabilise it and secure its long-term sustainability.

The plan’s funding by the company’s shareholders is subject to Alitalia’s trade unions agreeing to a new collective works agreement and headcount-related measures.

Airline management will soon present the board-approved plan to the Italian government and then meet with trade unions to explain the details of the business plan, headcount-related measures and resume talks on a new collective labour agreement.

Alitalia said it will reduce costs by €1 billion in the first three years of the plan by 2019 with reductions in operating costs and manpower. Alitalia will increase revenues, in the same timeframe to 2019, by 30% from €2.9 billion to €3.7 billion.

These financial performance indicators are judged to be realistic and achievable by independent advisors and the projected figures would turn Alitalia into a profitable business by 2019.

Alitalia cabin crew in new uniform

The business plan actions are supported by ‘four pillars of change’; a recalibrated business model, costs reductions and enhanced productivity, optimisation of network and partnership, and develop commercial initiatives by utilising technology investments to drive revenue.

Cramer Ball, Alitalia CEO, said, “With the approval today by the Board of Directors of the second phase of our business plan we can now accelerate our actions towards turning around Alitalia. We re-built our brand in the first phase and invested heavily in staff training and technology so we are now able to move ahead and implement wide-ranging changes. The aviation industry is ferociously competitive and never stands still. Only through radical change will Alitalia’s fortunes be turned around. We must transform this business into a dynamic entity that is attractive to customers who have plenty of choice for their air travel needs. Consumers’ buying habits have been shaped by how low cost carriers sell their products. I am confident that the next phase of the industrial plan will represent the step forward needed, provided that all interested parties play their part. The radical and necessary measures across the entire airline will secure our long-term sustainability which will only materialise if the airline is the right size, the right shape and with the right productivity and cost base. We must do this, especially in our short and medium haul business in order to provide a platform to grow our profitable long-haul business further in the future. This is a critical aspect because most of our customers fly on our short and medium-haul planes to connect onto our long-haul services. If we can’t compete throughout Italy and Europe against low-cost carriers then we lose air travellers that connect onto intercontinental flights. Put simply, there is absolutely no alternative.”

Details of the four pillars of Alitalia’s second phase of its business plan are:

Recalibrated Business Model

Narrow body planes for the short and medium haul will see an increase in utilisation, extra seats are being fitted, buy-on-board and ancillaries services and more attractive air fares will be introduced in a concerted drive towards increasing revenue while stripping out existing costs.

Mr Ball said: “In the short and medium-haul markets – domestic flying in Italy and throughout Europe – passengers will be able to personalise their journey. We will simplify air fares and offer customers the opportunity to purchase products such as seat selection, checked-in luggage and priority boarding throughout the booking process, and all the way up to the airport gate. On flights that are four hours or less we will introduce the buy-on-board concept that is not only commonplace with low-cost carriers but is happening more and more at traditional, network airlines. We will offer our customers a choice of ‘made in Italy’ hot and cold food, snacks and drinks at competitive prices.”

Alitalia’s wide-body intercontinental flights will be based on a full-service model and maintain an intense focus on costs and efficiency. In addition to Alitalia’s A330 fleet, the carrier’s Boeing 777s will be fitted with new in-flight entertainment and Wi-Fi. Alitalia’s new flagship aircraft, a 382 seater Boeing 777-300ER, will join the long-haul fleet in August 2017.

Cost Reductions and Increased Productivity

Low cost carriers currently represent 47% of the Italian air travel market, the highest market penetration in Europe.

Talks are already underway with a number of the airline’s suppliers to renegotiate contracts and drive down costs to levels comparable with the competition. Target companies are in sectors such as aircraft leasing, global distribution, in-flight catering, airport ground handling and airports themselves.

Network and Partnership Optimisation

Alitalia will rebalance its fleet of aircraft by 2018, reducing its narrow-body fleet by 20. The airline will increase aircraft utilisation with a particular focus on short and medium-haul aircraft. Alitalia plans to grow its number of flights from Italy to the Americas – one of its most underserved markets – and build its presence at Milan Linate, Sicily and Sardinia. The airline will re-evaluate its transatlantic options to try and fly more often on existing routes and to add new cities in the Americas.

New Commercial Initiatives by Utilising Technology Investments to Drive Revenue

Alitalia has invested €200 million in the last two years on new technology and it will now use the investment to improve efficiency and productivity to drive further revenue opportunities.

Mr Ball said: “Our investment in technology will enable us to develop new sales channels and this will contribute to increasing our revenue by 30% by 2019. Consumers use tablet devices and mobile phones more than ever to manage their travel experiences, and we will make it easier for them to interact with the airline. About 20% of our customers already use on-line ways to book their flights and we aim to increase that figure to more than 50%. Our customers will continue to notice our enhancements and realise that Alitalia has become a different airline from the past.”

See other recent news regarding: Alitalia, Technology.

Subscribe to our Latest Travel News Daily Email Free of Charge by simply entering your email address to the right. You can also stay updated with our RSS Feed Free Travel News RSS Feed and even add the travel news to your website. Have questions? Please read our travel news FAQ.
Sustainable Hotels and MICE. Exclusive HD video interview with Grace Kang, Managing Partner of Greenview Hospitality. Criteo Travel Flash Report 2016. Exclusive HD video interview with Mr. Daniele Beccari, Global Head of Travel at Criteo. Chef Fernando Arevalo, originally from Bogota, Colombia, worked his culinary magic in New York and Hong Kong before moving to Singapore where he is today the Executive Chef of Artemis Grill on the 40th floor of Singapore's newest green building - CapitaGreen.
Sustainable Hotels and MICE Criteo Travel Flash Report Colombian Chef in Singapore
Exclusive HD video interview with Mr. Hiroshi Sawabe, Executive Director of the Office of International Tourism, at JATA (Japan Association of Travel Agents). In this interview filmed on 24 September at the JATA Tourism Expo 2016 in Tokyo, Japan, Mr. Sawabe speaks to Steven Howard of TravelNewsAsia about the status of tourism within the country. HD Videos from Sabre's Travel Technology Exchange APAC 2016. Sabre, a leading technology provider to the global travel industry, hosted over 500 members of the Asia Pacific travel industry at its inaugural Asia Pacific Travel Technology Exchange (TTX) conference in Beijing from 21 to 24 September 2016 Spa and Wellness Industry - HD Video Interview with MD of Thailand-based Destination Spa Management, Joy Menzies.
Japan Tourism Update Sabre TTX APAC 2016 Destination Spa Management
Jonathan Wigley, CEO of Travelodge Thailand, outlines expansion plans in HD Video Interview. Exclusive HD video interview with Myanmar's Minister of Tourism and Hotels, H.E. U Ohn Maung, about the status of tourism in the beautiful and mystical country of Myanmar (formerly known as Burma). Birth of a Luxury Thai Hotel Brand - HD Video Interview with Christopher E. Stafford, Chief Operating Officer of the newly formed 137 Pillars Hotels & Resorts.
CEO of Travelodge Thailand Myanmar Tourism Update Birth of Luxury Thai Hotel Brand
This HD video tour of Thai AirAsia X's brand new 337-seat Airbus A330-300 aircraft was filmed at Don Mueang Airport in Bangkok, Thailand on 14 May 2014  Exclusive HD video interview with Jaime J. Bautista, President & Chief Operating Officer (COO) of Philippine Airlines (PAL) HD video of the interior and exterior of a Thai Vietjet Airbus A320-200.
Thai AirAsia X A330-300 PAL President & COO Thai Vietjet A320-200
Inside Qatar Airways Boeing 787-8 Dreamliner - HD Video It takes 800 workers between 65 and 80 days to assemble, install, test, paint, furnish and deliver an Emirates Airbus A380. Showers, Bars, Lounge - The Emirates Airbus A380 Has Them All - HD Video Tour Thai Airways International Takes Delivery of Brand New Boeing 777-300ER
Qatar Airways B787 Emirates A380 Thai Airways B777-300ER
Latest Travel News
Copyright © 1997-2017