Alitalia: politics trumps business logic. Again

The 31-Oct-2018 press release from perennial loss-maker Alitalia that its administrators had received two binding offers and a non-binding expression of interest was in accordance with the previously communicated timetable for the planned sale of the airline. However, it may turn out to be as meaningless as all the other announcements and deadlines about the sale of Alitalia since the airline entered administration in May-2017.

The most recent announcement did not divulge the names of the bidders, but easyJet publicly revealed itself to be behind the expression of interest. In addition, Italy's state-owned railway company Ferrovie dello Stato had already said that it would make an offer (in effect, as a proxy for the state). Several media outlets reported that the third bidder was Delta Air Lines, although it would only be allowed a minority stake. Lufthansa, previously a bidder, has said that it is no longer interested.

The administrators will have to propose the best offer to the government. Although the Italian state currently has no shareholding in Alitalia, the final decision will be for the Minister for Economic Development. As in the past with Alitalia, politics are likely to trump any other logic.