All-out negotiations to get the Ita-Lufthansa alliance off the ground. The MEF legal teams and those of the German company are looking for a meeting point after Frankfurt’s request to obtain a discount on the price of the second investment tranche. A request that sent the Treasury into a rage as it did not expect a move of this type. According to the version leaked by the Germans, the need to review the price would be linked to the loss of value of Ita’s assets following the postponement of the closing set for this summer. The Mef technicians have an opposite opinion and argue the exact opposite, i.e. that Ita, also by virtue of the traffic boom linked to the Jubilee, has increased its intrinsic value. Be that as it may, in the agreement signed in July there are clauses which provide, on a theoretical level, for the revision, and which are now the subject of the lawyers’ evaluation, then the comparison, once the response has been obtained (there is the hypothesis of a full-blown arbitration), will move to a higher level, involving the Minister of Economy Giancarlo Giorgetti, and the number one of Lufthansa, Carsten Spohr.
Summit between Giorgetti and Spohr to save Ita-Lufthansa
From the Treasury transpires, at least informally, optimism and the conviction of starting from a position of strength. Even on the opposite side there is the desire to close the game, given that the figure would be between 10 and 90 million. Compared to an operation approaching 1 billion.
The stumbling block is therefore more on the general principles, on the philosophy of the agreement. The public shareholder could also lengthen the time spent in the capital or at least better tighten the bolts of a marriage that has been waiting to be celebrated for almost 2 years. After the legal checks, the Treasury will illustrate the position but has no intention of “selling off the national airline” which, thanks also to the Turicchi cure, has returned to profit, increasing revenues and the number of passengers transported. And with the Jubilee, of which it is the official carrier, it will see a strong boost in turnover. Given the delicacy of the situation, nothing official emerges, but the CEO of Lufthansa may have already arrived in Rome in these hours to seal the peace in secret.
Ita-Lufthansa in stalemate, tug of war over price: the distance is 10 million, discount requested one step away from closure
The crisis
Meanwhile, Alitalia Sai has started the dismissal procedure for 2,059 employees. This is a path already outlined which involves 1,170 flight attendants, 82 pilots and 100 aircraft maintenance workers. The 2,059 employees will be able to count on the redundancy payment until 31 December 2024 and then, after dismissal. on Naspi. The union, from Fit Cisa to CGIL, hopes that some of these staff can find a place in Ita. «Due to the company’s involvement in the extraordinary administration procedure», we read in the letter sent to the unions, the Ministry of Labour, the Ministry of Transport and the Ministry of Business, «it is believed that, at present, no further instruments provided for by the law or can be adopted through negotiation to deal with staff surpluses can be considered applicable or compatible with the current company situation in order to limit the consequences on a social level. The company’s conditions also do not allow the implementation of other types of interventions on the use of personnel through the use of flexible forms of working hours or part-time work”.
As will be remembered, the layoffs were blocked in September with a two-month extension of the redundancy fund after a meeting with the union representatives at the Ministry of Labour. The unions also ask for a meeting with the Mef on the Ita-Lufthansa case.
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The Hilarious Tug-of-War: Ita-Lufthansa Alliance Negotiations
Ah, the world of airline mergers! If it’s not a sitcom, then I don’t know what is. Picture this: the dream team of legal eagles from the Italic skies and their German counterparts, flapping around like it’s some sort of high-stakes game of chess. The latest twist involves a discount request that has sent the Italian Treasury into a tizzy! The Germans want a haircut on the price of the next investment tranche—something akin to receiving a ‘please, sir, can I have some more?’ while waving a ticket to first class. But surprise, surprise! The Treasury wasn’t expecting that bargain bin tactic. Who do they think they are, the characters from a bad airline rom-com?
The Price of Love
Now, according to our fine-feathered friends from Germany, the need for a discount hinges on their opinion that Ita’s assets have lost their sparkle. But hold your horses, says the Ministry of Economy and Finance! They’ve rolled out the red carpet of optimism, arguing that thanks to a traffic boom related to the Jubilee—yes, the one where people travel to find divine intervention—their intrinsic value has soared! Makes you wonder if they’ve been taking stock tips from fortune tellers!
In all seriousness, this negotiation shouldn’t be conducted over tea and biscuits. No, it’s more a matter of who gets the cookie jar first. With the officials hoping to wrap up a deal worth up to €1 billion, and only a measly gap of €10 to €90 million in discussion, you can see why everyone’s on edge. Just think of it as being at a wedding where the bride’s dad suddenly announces there’s no money left for the reception!
Ministerial Mayhem
And oh boy, wait for what comes next! It seems the venerable Giancarlo Giorgetti of the Treasury may have to bring out his best party tricks to negotiate the next steps. Indeed, we might want to keep a live stream of the meeting with Carsten Spohr—the big cheese of Lufthansa. Imagine the two of them, seated across a table filled with charts and, let’s be honest, probably both holding a glass of something—they’d better not be too close to the edge of that table!
But will they seal this deal quietly? Word on the street is that Spohr might have slipped into Rome under the cover of night, like a secretive agent on a mission to “save” the long-awaited wedding of Ita and Lufthansa. I just hope they’re not planning a honeymoon in a budget airline!
Layoffs: The Uninvited Guests
Now, let’s not forget the elephant in the room—or should I say, the uninvited guests at this wedding? Meanwhile, Alitalia Sai is figuring out how to say goodbye to over 2,000 employees. That’s no small number! Little do they know that they’re part of a tragic saga playing out amidst the backdrop of hopeful negotiations. Talk about your one act play gone wrong!
The union reps surely have their work cut out for them. They’re hoping some brave souls from the redundancy list can find their way into the arms of Ita, but honestly, it’s like trying to seat all your exes at the same dinner party and hoping for the best. The Ministry of Labor, Transport, and Business are getting involved, and let’s just say, that can only lead to awkward conversations.
Final Thoughts
So, what’s the moral of this story? In the world of air travel and corporate alliances, everyone is looking for a seat at the table without wanting to pay for a first-class ticket! The Ita-Lufthansa saga is shaping up to be both a comedy and a tragedy, reminiscent of the finest Shakespearean mixes—minus the dramatic flair and high culture, of course! So grab your popcorn and stay tuned because this merger drama is far from over.
Intensive negotiations are underway to launch the much-anticipated Ita-Lufthansa alliance. Legal teams from Italy’s Ministry of Economic Affairs (MEF) and Lufthansa are striving to find common ground after a surprising request from the German airline for a discount on the second tranche of investment. This unexpected move sent shockwaves through the Treasury, which had not anticipated such a development. According to information leaked from the German side, the request for a price review stems from a perceived decline in the value of Ita’s assets, especially due to the delay in finalizing the agreement that had been slated for this summer. However, MEF experts counter that, thanks to a surge in air traffic linked to the Jubilee celebrations, Ita has actually increased its intrinsic value.
The agreement signed in July includes clauses that theoretically allow for price revisions, and these clauses are now under careful legal scrutiny. Following this assessment, discussions are expected to escalate to a higher tier, involving Economy Minister Giancarlo Giorgetti and Lufthansa’s CEO Carsten Spohr.
A summit between Giorgetti and Spohr is being held to salvage the Ita-Lufthansa deal, reflecting a sense of optimism from the Treasury, which believes it holds a strong negotiating position. There is mutual desire to finalize the agreement, which hinges on a relatively minor financial discrepancy estimated to be between 10 and 90 million euros, especially considering the overall operation is approaching 1 billion euros.
The crux of the matter seems to lie in the broader philosophical approach to the agreement itself. The public shareholder might consider extending the investment period or reinforcing the framework of a merger that has been anticipated for nearly two years. After thorough evaluations, the Treasury will formally present its stance, reaffirming its commitment not to “sell off” the national airline, which has returned to profitability under the guidance of CEO Antonino Turicchi, significantly increasing both revenues and passenger transport numbers. Additionally, with Ita serving as the official carrier for the Jubilee, an uptrend in turnover is anticipated. Given the sensitivity surrounding these negotiations, no official confirmations have surfaced; however, it has been reported that Lufthansa’s CEO is potentially in Rome to secretly finalize the agreement.
The Crisis
In parallel developments, Alitalia Sai has initiated the process to dismiss 2,059 employees. This procedure will impact 1,170 flight attendants, 82 pilots, and 100 aircraft maintenance staff. Affected employees will be granted redundancy payments until the end of 2024, followed by access to Naspi benefits post-dismissal. Unions, including Fit Cisl and CGIL, are hopeful that some displaced workers may find positions within Ita.
According to a letter sent to unions, due to the company being in extraordinary administration, the Ministry of Labour, along with the Ministries of Transport and Business, believes that no further legal mechanisms or negotiated interventions can be employed to address personnel surpluses at this time without exacerbating the social repercussions. Moreover, the current corporate condition precludes implementing alternative employee management strategies, such as flexible working hours or part-time positions.
As a reminder, layoffs were previously halted in September, following a two-month extension of the redundancy fund after discussions with union representatives at the Ministry of Labour. Unions have also requested a meeting with the MEF concerning the Ita-Lufthansa negotiations.
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Ased its revenue in the past months.
Despite these negotiations, an unsettling chapter looms in the background concerning layoffs at Ita, as Alitalia Sai plans to part ways with over 2,000 employees. The unions, already on high alert, have stepped in, advocating for discussions that could potentially integrate some of those employees into Ita as the restructuring unfolds. However, this impending workforce reduction complicates the atmosphere, adding an emotional layer to the already tense negotiations between the airlines.
As this drama unfolds, it showcases the complexities and comedic absurdities often found in corporate negotiations. The stakes are high for both parties, and the outcome will not only affect the corporate landscape but also the livelihoods of countless employees. The ongoing saga is sure to keep stakeholders—and indeed the public—on the edge of their seats, eagerly awaiting the final curtain call for the Ita-Lufthansa alliance. Stay tuned for what will surely continue to be a blend of corporate high drama and unexpected comedy!
