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Alitalia conclusion

The last years of Alitalia, highlighted the following situation:

in 2012 Alitalia lost EUR280 million, bringing its cumulative net loss to EUR843 million since the

new Alitalia was created in 2009.

In Feb-2013, with its cash reserves almost evaporated, it had to ask its shareholders for a EUR150

million loan to fund its operations.

Since 2009, there have been operational improvements, leading to rising load factors and much

improved on-time performance, and a major fleet replacement and renovation programs. Unfortunately,

these positive developments have not set Alitalia on the path to financial health. Moreover, while itscost base is fairly competitive against full service network carriers, it remains very high cost compared

with the short-haul point-to-point Low Cost Carriers with whom it increasingly competes. Loss-

making, bleeding cash and currently leaderless, Alitalia faces a Battle for Survivalin 2013, also

because since the new company came into existence in 2009, Alitalia has not made 1 ofprofit.

It was expected also that Air France-KLM, which had more less the 25% of the company, would

eventually take control with the time of its partner, but since they understood the intentions of the

Italian cordata, they stayed away from any decision.

As we can see, the economical situation of Alitalia remained the same also after the cordata and after

the huge investments made in the recent years. The main reasons that have lead to this decline were

mainly a bad governance, since there were a lot of people involved with a lot of difficulties to take anydecision and specially because of internal interests conflicts since entrepreneurs involved had no

interests on changing the spectral situation.

Other important reasons that lead to this situation was a No long run term project of at least 10 years,

that could bring the Italian company to really compete with the giants of the sector. The plan in fact has

been only able to adjust few negative issues of short run term.

The 13th

of January 2014 the new assembly has enacted the new main shareholders after a re-investment of the last months of 2013; the new members percentage are: Intesa Sanpaolo (20,59%),

Poste (19,48%), Unicredit (12,99%), Colaninno (10,19%), Atlantia (7,44%), Air France (7,08%), Riva

(4,28%), Antonio Percassi (3,9%), Maccagnani (3,69%) and Pirelli (2,67%).the new board of directors

Il nuovo consiglio scende has only 11 members (in comparison to the last one that had 19): RobertoColaninno (president), Gabriele Del Torchio (CEO), Fabio Can and Amedeo Nodari(Intesa San

Paolo), Davide Maccagnani (Macca), Ranieri de Marchis (Unicredit), Pierre Franois Riolacci (AirFrance), Paolo Luca Stanzani Ghedini e Alessandro Zurzolo (Poste Italiane), Mario Volpi (Percassi),

Antonino Turicchi (Atlantia).

In the last days, Alitalia is trying to build also a strategic partnership with Etihad Airways. Thispartnership is going to bring an income solidity and a long run term project, able to give to Alitalia a

big chance to compete with the other airlines in the world.

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Moreover, there is also the possibility again that the Italian state will help with some investments

Alitalia; this is going to be quite illogical because after almost 4 billions euros given to Alitalia and

then lost of them in the last 10 years could create a lot of indignation in the italian people.

There are a lot of doubts about this new investments and this new partnerships created, especially

concerning the ability of the new management to build a solid structure in the long term: will they beable to focus just on Alitalias investments without creating any interests conflict??? Will the new

Board of directors give a solid structure in terms of financial and economical incomes??? Will Alitalia

become again a strong company like it was 20 years ago??? But last but not least, will the management

create a long run term plan that will bring Alitalia to compete with the giants of this sector???

These are the questions that every italian citizen is asking about this new project. Time will give theright answers about it, and all the italian population is waiting for a response. We cannot do anything

else than hoping in the best solution for the country and for the company.

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