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Managing in Troubled Times Case Study

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Case Title:

Alitalia: The Airline in Trouble

Publication Year : 2004

Authors: Dakshi Mohanty, T. Phani Madhav

Industry: Transportation

Region:Italy

Case Code: TRT0005

Teaching Note: Available

Structured Assignment: Available

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Abstract:
The long-drawn crisis at Italy's national airline, Alitalia, started during the mid-1990s, when the low cost revolution invaded Europe. Even as the airline was fending off threats from the low cost carriers, the September 11 attacks followed by the SARS outbreak and the war in Iraq was sounding a death-knell to Alitalia. Twice the Italian government ferried the deteriorating airline out of bankruptcy - in 1997 and in 2002. But, when the bankruptcy woes came back in 2004, the European Commission opposed the government's move for a third bailout, raising serious doubts about the airline's survival.

Pedagogical Objectives:

  • To discuss how Alitalia, in spite of two bailouts, slipped to the verge of bankruptcy owing to pressures from low cost carriers and unions
  • To discuss the new industrial plan jointly developed by the government, Alitalia and the unions.

Keywords : Alitalia; Low cost airlines; Ryanair; Alitalia team; Alitalia Express; European Commission; Managing in Troubled Times Case Study; The bailout; Trade union problems; Industrial plan; Restructuring; Giancarlo Cimoli; Job cuts; Fintecna; Finmeccanica; Business plan

Contents:

  • The early days
  • Alitalia's crisis
  • The road ahead

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