Air Transport World

End of the Roman holiday. (Alitalia is getting down to business) (company profile)

FOR ALITALIA, THE LAST TWO YEARS HAVE BEEN ANYTHING BUT A VACATION. LEO BY INSPIRED MANAGERS AND HAVING WON LABOR PEACE, THE AIRLINE IS GETING DOWN TO BUSINESS--WHICH DOES NOT MEAN BUSINESS AS USUAL

ROME-THE old joke about Alitalia is that the italian flag carrier's name actually is an English-language acronym for the phrase, "Always late in talking off, always late in arriving." Some joke. Last year, Alitalia turned in the best on-time performance among airlines of the European Community, based on Association of European Airlines (AEA) statistics.

True, bad reputations are the hardest to live down but in reality, Alitalia is enjoying something of a renaissance these days, of which improved punctuality is only one indication. Arguably, more significant is that despite the disastrous impact of the Gulf War, 1990 actually was a better year than 1989, from a financial perspective.

And that's not all. Over the past two years, Alitalia has shed its Southern Mediterranean insularity and hashed out marketing agreements with Iberia, USAir and Taiwanese startup EVA Airways. A stagnating international network is being rejuvenated through the opening of five new cities, with three more on the way. To support this and further expansion, the airline has ordered dozens of new jets. Last year, the corporate structure was reorganized to cut management bloat and today, executives are using Japanese-inspired terms such as "total quality" to describe the new business philosophy.

In fact, Alitalia looks less and less like the flag carrier of old and more and more like a modem European airline. As if to symbolize that change, the airline recently moved into a spanking new office complex outside Rome, with a direct rail fink to Fiumicino Airport. The big question now is whether Alitalia can maintain its momentum over the next 16 months in the run-up to 1993, or whether it will return to the self-defeating patterns of the past.

The improvements date back to the management change in 1989 that brought Carlo Verri and Giovanni Bisignani to the airline.

Although Verri was killed in a car accident that November, Bisignani, who came to Ahtalia from its government-owned parent IRI, has remained as CEO and managing director during the turnaround.

"We had three main problems," he told ATW "Labor relations, productivity and structure and organization. In 1989, we were the only airline that was losing money in Europe and we were among the worst performers regarding efficiency [as measured by] punctuality."

A series of strikes by unhappy pilots, cabin crew and ground staff were prime contributors to the airline's problems and one of management's first acts was to win labor peace through new contracts offering significantly higher wages in exchange for improved productivity and no-strike agreements. …

Log in to your account to read this article – and millions more.