Air Italy Enters Liquidations

Qatar Backing Not Enough to Salvage Loss Ridden Airline

Air Italy JFK

Qatar Airways-backed carrier Air Italy has entered liquidation and is ceasing operations, the airline announced Tuesday, February 11th

Replacement flights for passengers booked on now-cancelled flights will be operated by other airlines until February 25. Those flights will be carried out using the same schedule as Air Italy, meaning that bookings for this period of time remain valid, the airline says in a statement.

In a statement to passengers, AirItaly said;

From 11 to 25 February 2020 inclusive, all Air Italy flights will be operated by other carriers at the times and on the days previously scheduled; all passengers who booked flights (outward or return) after 25 February 2020 will be re-protected or fully refunded by Air Italy.

With this event, Qatar Airways has suffered the first significant reversal in its strategy of buying up minority stakes in other airlines after one of its investments, Air Italy, announced it was to stop flying this month.

The heavily loss-making airline has two shareholders: Alisarda which is the majority owner with 51% and Qatar Airways, which holds its 49% minority stake through AQA Holding. The two owners appear to have differed about whether it was worth trying to turn around Air Italy, before eventually agreeing to shut down its operations.

In a subsequent Press Release, Qatar Airways said it had been prepared to extend further support to Air Italy, saying it “has continually reaffirmed its commitment, as a minority shareholder, to continue investing in the company,” and adding that it was “ready once again to play its part in supporting the growth of the airline, but this would only have been possible with the commitment of all shareholders.”

It seems it was unable to persuade its fellow owner, Alisarda, of the merits of its position. 

After posting a loss of $43.6 million US in 2017, Air Italy saw its losses jump to $180 million US the following year and an anticipated $250 million in 2019, according to Alisarda. Over the same period, revenues were heading in the opposite direction. 

Air Italy has faced multiple problems, including the grounding of the Boeing 737 Max aircraft in its fleet – following two fatal crashes by other airlines, in Indonesia in late 2018 and Ethiopia in early 2019. A further sign of trouble was the cancellation of several routes into Asia soon after launch

Joseph Alba
Mr. Alba was previously Editor of the Airport Press for 12 years covering both local as well as global aviation news. Prior to this, Mr. Alba had Executive positions in Systems Engineering and Marketing with IBM World Trade, and had foreign assignments in the Far East and Latin America earning three Outstanding Achievement Awards. Mr. Alba also directed a new function dealing with Alternate Fuels for Public Service Electric & Gas company in New Jersey and founded a Natural Gas Vehicle Consortium consisting of car company executives and fleet owners, and NGV suppliers in New Jersey. Mr. Alba was a founding partner of ATA, an IT Consulting company which is still active in Central and South America. After leaving the armed forces, Mr. Alba’s initial employee was the U.S. Defense Department as an analyst.

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