“Alitalia: Crisis” calls, and Italy replies. As always. The “loan” granted by the Government to Alitalia, despite the fact that the various government representatives have rush to declare the opposite, is in fact a new nationalization of the Company.
This implies that strategic decisions, that is, those that go beyond the mere management of flight continuity for tickets already issued, come once again under the authority of the Government.
Is there a positive twist that can be taken in the face of this additional economic effort required for public finance? What is the opportunity that, in this adverse circumstance, is presented to the Government and, for it, to the country? Could this situation be read as the last chance to straighten out not only the fate of an airline, but of the entire national air transport sector? Because this is what the Government has to worry about.
But what is actually an air transport strategy for the country? It is a strategy aimed at providing an answer in terms of passenger services, both Italian and non, that pass through our airports. Let’s identify these passengers. They are those who fly for work or for tourism. Italy has a geographic conformation and an orography that implies preferring air transport. A country whose territory is largely surrounded by the sea, cut from mountain ranges in both directions, longitude and latitude, separated from the rest of Europe by the high peaks, with the presence of two large islands and many other smaller islands, must rely on an efficient air transport system. The high number of airports (over 40 the major ones open to civil traffic), which testifies and confirms this need, is a great asset to ensure a capillary air transport network.
Hence: the Government is in the role of a shareholder who must implement a strategy that is necessarily functional to the needs of population mobility. Can this strategy be reduced to a sterile prioritization of long, medium and short range or unnecessary (and losing) competition with low cost airlines on short and super short routes? It would be better to broaden the view and analyze in a more comprehensive scenario the specific mobility needs, closely related to the country’s characteristic conformation and the consequent peculiarities of the motorway, rail and airport networks. Is it possible to conceive an organic strategy for the economy of a country rather than a company? Is not that by the way, such a strategy can also have the side effect of saving an airline and its employees?
Can this task be relied on to Easy Jet or Ryanair, can it be relied on to a foreign partner like Etihad or an Australian CEO? It is not a question of capacity or nationality but it is a simple matter of roles and knowledge of the territory, with its strengths and weaknesses.
Over the years, studies, research and analysis have been conducted; guidelines, national airport plans, plans to push intermodality, protect the market, respect the European guidelines etc… but in the end all the results these have produced has always had the limit to be interpreted as a temporary tool, and therefore only useful in buffering situations: the problem of financing at regional airports or the protection of this or that municipality or trying to cap the market in some way.
It is just to be noted that Italy has a very strong tradition in the field of air transport; without going too far back to Corradino d’Ascanio or professors of the rank of Umberto Nobile and others, just think about the tradition of the industry and the strong connection between academies and industry; which encompasses transport, aeronautics, aerospace and telecommunications engineering. Italian companies provide high-tech services and products all over the world. It is evident that are not the skills we lack, especially in Alitalia, whose main problem today is not even productivity but rather the ability to organize themselves to implement strategies, because at the same level other companies are able to be profitable while Alitalia doesn’t.
Let us therefore analyze in an objective way why today an efficient transport response to Italy could be the real key to the success of Italian companies: Alitalia, State Railways and Motorways in the first place, but also and above all the thousands of companies that to be able to develop their own business need an efficient and comprehensive transport system.
It may seem anachronistic, but what can still give a competitive advantage to “player Italy” over the various airline players who continuously approach the market to eat the Italian air traffic? It is not about unfair competition, going against the market, or a nostalgic regurgitating nationalism. Rather is just about putting the interests of the country legitimately into the center of the strategies. And on this point there is no European Commissioner who will ever object.
What are the roles that should now be under the responsibility of a flag carrier?
Let’s have a look at the situation today:
These results demonstrate that the market alone cannot replace the Government in its primary role that is protect the interests of the population and national companies.
It is worth noting that due to the liberalization of air transport and the advent of the low-cost model, the role of airports has changed much in recent years. They are no longer only “passive” providers of services to airlines and travellers, but have become more and more active agents and promoters of the transport services themselves, through the management of funding and incentives granted by the various local authorities.
In Italy, in addition to the dozens of wholly or partially privatized medium to large airports, there are over 30 second-tier airports, which are in need of public funding to keep going. All countries in the world obviously have a similar scenario, consisting of a system of primary airports and a network of regional airports. But “the Seconds” in no country are left free to manage public funds by pursuing their own agenda in the name of a misunderstood federalism. Air transport is not a regional issue because it must be integrated into a system logic to be effective.
There is much to be said about this, but let’s just say, for example, Spain: AENA is the national airport operator, a public company that, on a stock exchange, interprets the airport business as a national interest. In Spain, it is the Government, through AENA, to decide who and how shall receive marketing incentives and for which routes and destinations. AENA manages all airports. (See also ACI World Angela Gittens position on this subject).
So what can the State do in this scenario, in addition to injecting more public liquidity into a system that burns it at an impressive speed without leaving anything in terms of investment to strengthen its economy?
Simplifying to the maximum, the State should, with a touch of “benevolent authoritarianism,” put around a table companies holding the keys of national transport: Alitalia, Rail and Highways, which in a way or in the other (either by direct participation or by their role as concessionaires) must account for the Government, Airport operators, (Large, Medium and Small), with their shareholders (largely public, especially the smallest) and outline an Air transport strategy for Italy, without urgent financial pressures and other types of conditioning.
No one else can play this role. No one would have legitimacy and strength.
Only in this way it is possible to make sense of this farther loan. And it is in this capacity that we measure the true sovereignty of a country.
Marco Bruno
Air Alliance CEO