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Alitalia, carrier of popes, is born again

Tue Jan 13, 2009 5:49am EST

By Deepa Babington

ROME, Jan 13 (Reuters) - Alitalia, the airline that has flown popes and prima donnas, took to the skies as a revamped, privately owned carrier on Tuesday after nearly being grounded for good.

Once the symbol of Italy's post-war economic boom, Alitalia filed for bankruptcy last year, succumbing to labour strife, high costs and mismanagement. A group of Italian investors bought its best parts, leaving the rest to the Italian state.

After months of haggling with unions and frenetic talks with politicians seeking to save local airports, Alitalia flight AZ 676 to Sao Paolo took off promptly at 0510 GMT from Milan in the carrier's virgin flight under a new network and new owners.

"This is a very important moment. After months of suffering, work and sacrifice, there has been a turnaround in Alitalia's history," said Gianni Letta, a top aide to Prime Minister Silvio Berlusconi, who had vowed to save Alitalia.

In a reminder of the old challenges facing the restructured carrier, scattered protests by a few unions at Milan's Malpensa airport threatened to disrupt flights.

The unions have been bickering with Alitalia's new owners for months, accusing them of not respecting prior agreements. Alitalia CEO Rocco Sabelli said the unions were mainly unhappy with their pick of a new cleaning service.

"I don't have any illusions," Sabelli, who had earlier said Alitalia had drawn up an emergency plan to deal with protests, told La Stampa daily.

"There are problems to be resolved, and there will be plenty more to resolve."

The new Alitalia maintains the carrier's brand and livery, but its new owners have revamped its flight network, axed a third of the workforce and partnered with larger rival Air France-KLM in a bid to return it to a profit. [ID:nLC210075]

With its operations merged with those of smaller rival Air One, Alitalia will fly to 47 foreign and 23 Italian destinations in the new network. It targets increasing its market share to 56 percent from 30 percent and posting break-even results in two years.

The airline may relist on the stock exchange in three years.

Italian newspapers published nostalgic pictures of Alitalia's flights during its 1950s-60s heyday, with movie stars like Sofia Loren waving from the landing stairs and stewardesses sporting prim Alitalia-branded hat boxes and designer uniforms.

Alitalia first took to the skies on Sept. 16, 1946, in the tumultuous post-war period and later became the preferred carrier of popes and movie stars.

Film diva Anita Ekberg landed in Rome in Federico Fellini's 1960 classic "La Dolce Vita" on an Alitalia DC-6B propeller plane, and Pope Paul VI began the tradition of papal voyages on Alitalia by using it on the first flight by a pope in 1964.

But the state-controlled carrier soon became a vehicle for political favours, and its unionised staff, who enjoyed lavish perks, prevented it from restructuring to meet the challenges of an aviation downturn and low-cost competition. (Editing by Will Waterman)



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