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Alitalia – The failure of a national carrier

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  • Beria, Paolo
  • Niemeier, Hans-Martin
  • Fröhlich, Karsten

Abstract

The paper examines the case of Alitalia, Italy’s former flag carrier, as a case of a state-managed failure. The history of the airline is characterized by a continuous decline in its competitive position since the progressive liberalization of the European aviation market. The root cause of this decline lies in the carrier being mainly used as a political tool rather than operating as a competitive firm. In a liberalized market this doomed Alitalia to failure, which was artificially delayed by numerous state financial and regulatory interventions. The paper starts with a historical overview of the most important events in recent Alitalia history. Thereafter the main causes of the airline’s weak competitive position relative to other European carriers are analyzed. We argue that the underlying causes of the decline were continuous political protection, lack of strategic views in favor of short-term objectives, and poor managerial decisions.

Suggested Citation

  • Beria, Paolo & Niemeier, Hans-Martin & Fröhlich, Karsten, 2011. "Alitalia – The failure of a national carrier," Journal of Air Transport Management, Elsevier, vol. 17(4), pages 215-220.
    • Handle: RePEc:eee:jaitra:v:17:y:2011:i:4:p:215-220
    DOI: 10.1016/j.jairtraman.2011.02.007
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    References listed on IDEAS

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    1. Barbot, Cristina & Costa, Ã lvaro & Sochirca, Elena, 2008. "Airlines performance in the new market context: A comparative productivity and efficiency analysis," Journal of Air Transport Management, Elsevier, vol. 14(5), pages 270-274.
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    5. Bergamini, Elisabetta & Gitto, Simone & Mancuso, Paolo, 2010. "Restructuring the Alitalia business model," Journal of Air Transport Management, Elsevier, vol. 16(1), pages 16-19.
    6. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, December.
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    Citations

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    Cited by:

    1. Mancuso, Paolo, 2014. "An analysis of the competition that impinges on the Milan–Rome intercity passenger transport link," Transport Policy, Elsevier, vol. 32(C), pages 42-52.
    2. Dobruszkes, Frédéric & Dehon, Catherine & Givoni, Moshe, 2014. "Does European high-speed rail affect the current level of air services? An EU-wide analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 461-475.
    3. Beria, Paolo & Laurino, Antonio, 2016. "Determinants of daily fluctuations in air passenger volumes. The effect of events and holidays on Milan Malpensa airport," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 73-84.
    4. Akbar, Yusaf & Németh, Adél & Niemeier, Hans-Martin, 2014. "Here we go again…the Permanently Failing Organization: An application to the airline industry in Eastern Europe," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 1-11.
    5. Pellegrini, Paola & Rodriguez, Joaquin, 2013. "Single European Sky and Single European Railway Area: A system level analysis of air and rail transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 57(C), pages 64-86.
    6. De Nicola, Arianna & Gitto, Simone & Mancuso, Paolo, 2013. "Airport quality and productivity changes: A Malmquist index decomposition assessment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 58(C), pages 67-75.
    7. Beria, Paolo & Bertolin, Alberto, 2019. "Evolving long-distance passenger services. Market concentration, fares and specialisation patterns in Italy," Research in Transportation Economics, Elsevier, vol. 74(C), pages 77-92.
    8. Stefan Gössling & Frank Fichert & Peter Forsyth, 2017. "Subsidies in Aviation," Sustainability, MDPI, vol. 9(8), pages 1-19, July.
    9. Guillaume Burghouwt & Frédéric Dobruszkes, 2014. "Dossier: Institutions and skilled mobility. Guest Editors: Gery Nijenhuis & Maggi W.H. Leung," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 105(5), pages 604-621, December.

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