Ryanair pulls bid for Alitalia as labor crisis rages

By: Theo Nichols

October 4, 2017

Ryanair 737, Credit: Wikimedia

Ryanair has pulled its bid to acquire bankrupt Italian flag carrier Alitalia as the Irish discount carrier removes all “management distractions” amidst a raging battle between crew and management.

Ryanair has had to cancel nearly 20,000 flights affecting over 715,000 passengers due to a pilot vacation scheduling gaffe that has left flights understaffed or not staffed at all. To make matters even worse for management, Ryanair pilots and crew have used the spotlight of the scheduling fiasco to push for various concessions, such as better pay, permanent employment contracts, and unionization. In the midst of the current chaos befalling Ryanair, the focus of Ryanair executives is squarely on resolving the pilot scheduling crisis and management’s strained relations with crew.

A surprising bid

This past May, Alitalia collapsed into bankruptcy and was put up for auction by the Italian government. In September, O’Leary revealed Ryanair’s surprising bid to acquire a majority of Alitalia’s assets, including all of the airline’s long-haul aircraft along with maintenance workers and crew. For an all-737 short-haul low cost carrier, it was an odd proposal. It was generally industry consensus that outside airlines would bid for Alitalia’s attractive assets while avoiding Alitalia’s inefficient operation and bloated cost base.

While Ryanair has pulled out of the running for Alitalia, Italy still presents a major growth opportunity for Ryanair. In the past few months, Ryanair has ramped up frequencies and added flights at Milan Malpensa and Rome. Ryanair is also testing its new connecting platform in Italy. Ryanair currently holds around a 24% market share in Italy by total airport seat capacity with a goal of a 37% share in the coming years.

Around eighteen airlines have expressed interest in acquring parts of Alitalia, including IAG, easyJet, and Lufthansa. Bidders have until October 16th to place binding offers for Alitalia.

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