The manager spent most of his professional life at Fiat.
(Photo: via REUTERS)
Frankfurt, Rome Alfredo Altavilla seems relieved when he talks about the takeover bid: It is a “great success for ITA Airways” to have aroused the interest of an airline like Lufthansa and a large shipping company like MSC. Altavilla, chairman of the board of directors, finds it difficult to hide the fact that there is also pride in his words.
No wonder, many managers have already bitten their teeth on the renovation of the predecessor Alitalia. The former Italian icon did not emerge from the crisis for many years, despite government aid worth billions. The rescue attempts mostly failed due to the disastrous alliance between trade unions and politicians.
2017 showed how this connection restricted any ability of the management to act: the employees voted against a restructuring plan – at that time still involving the golf airline Etihad as a major shareholder. Although the workforce knew that bankruptcy was imminent, they accepted it. The state would step in again, as so often.
Three administrators commissioned by the Italian government took over the management – they too made little progress with the conversion. Then the state railway company got in and was supposed to put together a consortium. Even that didn’t work.
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By that time, Alitalia had finally become a plaything for the then government. She rejected any radical restructuring: “We will do everything to ensure that a flagship company like Alitalia is not sold out to some multinational corporation or foreign company,” said Matteo Salvini, head of the right-wing populist League and then interior minister.
ITA Airways is not considered the economic successor
Altavilla has to overcome significantly fewer hurdles than its “predecessors” at Alitalia: ITA Airways is not considered an economic successor. Many of the legacy issues have stayed with Alitalia – and are being wound up. The 59-year-old screwed heavily on the cost structure, the new salaries are well below those of the Alitalia contracts. Instead of the previous 11,000 employees, ITA Airways employs just over 2,200 people.
Altavilla has spent almost his entire career at Fiat: the graduate economist went to Beijing, Turkey, for the car manufacturer and was one of the heads of the Chrysler merger. Most recently, he was responsible for European business as the right hand of FCA boss Sergio Marchionne and was considered a potential successor. When Marchionne died in 2018 and Altavilla didn’t get a chance, he gave up.
Apart from a few supervisory board mandates, things have remained relatively quiet around him. Then came the comeback in June 2021: the government around Prime Minister Mario Draghi made the manager, who was born in Apulia in southern Italy, the new President of ITA Airways. The job was clearly defined: he was to restructure the airline – while also looking for a long-term partner.
Altavilla is considered to be well connected in politics and business. He also arranged the deal with Lufthansa and MSC himself: he has known shipping company owner Gianluigi Aponte and his family for a long time, and he has also had personal exchanges with Lufthansa CEO Carsten Spohr. Altavilla admits that bringing both parties to the table was “a big challenge”.
Operating loss of 170 million euros in 2021
Altavilla’s step is clever: in Italy itself there is hardly anything for airlines to do, the train network is too well developed. The airlines almost only make money on long-haul routes. That would be most feeder flights to MSC’s cruises. As part of Lufthansa, the airline could also benefit from synergies within the group.
As early as November, a few weeks after the start in the middle of the fourth corona wave, Altavilla tied up with the Germans in an interview with the Handelsblatt. At that point it was already clear that the shrunken airline with its 52 jets would not be able to survive on its own. Altavilla then closed the year 2021 with an operating loss of 170 million euros. But now he only looks ahead. The chemistry between Spohr and Aponte is right, says Altavilla. “Let’s hope the conditions hold until the end of this adventure.”
More: Takeover by Lufthansa and MSC? “The industrial logic of the offer is very convincing”