Alitalia SAI has announced that it will not renew its partnership agreement and ancillary joint ventures agreements with Air France-KLM when they come up for renewal in 2017.
The initial agreements were concluded with Alitalia CAI in 2009 and 2010 under “very different economic circumstances” and were subsequently transferred to Alitalia SAI in January of this year.
The agreements include the government of passenger services operated by the three carriers between both Italy and France and Italy and the Netherlands and beyond, and incorporated the marketing, sales and distribution of Alitalia Cargo belly services undertaken by Air France-KLM.
Silvano Cassano, CEO of Alitalia, said: “These agreements are no longer beneficial, either commercially or strategically, to the new Alitalia and its ambitious turnaround plan. They were negotiated when Alitalia was in a very different position, with the result that the agreements in their current forms favour the other party.”
Italy’s national airline signed a deal with Etihad Airways in August last year in which the Gulf carrier acquired a 49 percent stake, becoming the company’s largest stakeholder.
The €1.7 billion rescue plan kick-started an ambition restructuring of Alitalia in an attempt to turn the airline into a premium five star airline, by focusing on the business class experience.
The airline will be introducing new seats, new service concepts, and will be installing wifi throughout their fleet, as part of the plan, with the aim of returning to profit in 2017.
“They are undermining our ability to restructure our network and the airline effectively to achieve the long term sustainability of our business. The new Alitalia is in a new position. Our business needs agreements which deliver equitable value to each party,” Silvano Cassano added.
The Italian airline’s first priority is to win back the inbound tourism market, while better serving Italian leisure and business travellers. Alitalia also has plans to deliver up-to-date cargo solutions to the Italian manufacturing industry, the second largest in Europe.
“We have indicated to Air France-KLM that we are willing to discuss more equitable arrangements that benefit all the parties involved, but thus far we have been unable to achieve this result.”
“We remain open to further discussions to achieve a mutually acceptable solution. However in the interest of transparency and certainty for all parties, we felt it necessary to announce our intention not to renew these agreements under the present conditions,” he added.
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