STRENGHT WEAKENESS

S W
• It serves more than 90
destinations in 41 countries
worldwide
• It is the Italian’s flag carrier
• It has the highest market share
in the domestic market
• High service level
• It is one of the most punctual
airline in the European market
• Limited market share in the
international market
• It is in a bad financial position
and almost went bankruptcy in
2009
• High investments in order to
change policies

OPPORTUNITIES THREATS

O T
• Enanche the number of • Rising of operative costs such
international destinations as labour cost
• Possible partnership with • Low cost competitors in the
Italian High Speed Trains short-medium distances (both
• Possibility to back sourcing airline companies and high
some expensive services such speed train)
as maintenanche and
outsourching others less critical

GROUP 8 1
PROBLEMS:
Average daily flight hours in the short to medium range in relation to
• Alitalia focus on the SHORT or MEDIUM –HAUL the average distance covered (in km)
ROUTES (89% of the passengers)
Alitalia has more than 90 destinations worldwide of
which 26 inside the Italian border and the remaining are
mainly in Europe;
This policy lead to an important source of crisis for the
Italian company. In fact, on this type of route Alitalia
must compete not only with low-cost airlines like
Ryanair but also with high-speed trains, extremely
efficient in terms of timing and costs. The fact is that
short routes are on average less profitable or even a
source of loss

The graph shows, for each airbus model used, the data relating to the
use of medium-short routes which depend however on the length of
the covered routes: the increase in distance also increases the use of
aircraft. In this typology Alitalia (AZ), penalized by the predominance of
domestic flights over European ones, is together with Iberia (IB) always
below the interpolating line. They are close to the Air France (AF) and
British (BA) lines and far above Lufthansa (LH) and its subsidiaries
Austrian (OS) and Swiss (LX), but above all EasyJet which has the most
intensive use. Therefore, not only is Alitalia's fleet very expensive, but in
the short to medium range it is more expensive per seat offered also
because it is not adequately used

GROUP 8 2
• Low capacity on the LONG routes
COST PER PASSENGER
9
The main long route for Alitalia, the one to North 8
America, have the capacity for about 33 thousand
7
passengers a week during the peak season just one
6
seventh of the capacity of British Airways and about a

cent/km
third less than the small Air Lingus, the Irish airline. 5

Within the European’s border the low cost companies 4

are the leader ones. 3

Even thought Alitalia is the leader company for 2
international flights from Italy, it stops at 28% that is an 1
extremely low value for the so call «home carrier» that
0
should be included between 40% and 60%. Alitalia Eurowings Ryanair Vueling Easyjet

Italy-EU Italy-extra EU
12%
20%
28%
6%

9%
49%
12%

3%

3%

5%

41% 12%

Ryanair Easyjet Others Lufthansa Air France Alitalia Others Emirates Qatar Airways Delta Air Lines Royal Air Maroc Alitalia
GROUP 8 3
 • Block hours
It measures of the total time that its aircraft were in use
during a given period, and it is the industry standard
measure of aircraft utilization.
An even bigger problem concerns the short and medium
range fleet. Here Alitalia aircraft have a number of "block
hours“ much lower than the two main competitors.
The number of block hours for an airline is a. According to
data, block hours of the Italian company Alitalia dramatically
decreased from 432 thousands in 2013 to 409 thousands in
2015.
If we compare it with others companies, Ryanair has 20%
Block-hours more and Easyjet succeed in havein a 43% of
Bicocca’s university data
Block-hours more than Alitalia.

Block-hours
160

140

120

100

80

60

40

20

0
Alitalia Ryanair Easyjet

GROUP 8 4
• The labour cost: It is NOT a problem Labor cost/revenue - 2015
If we look at the ratio between the labour cost and the
revenue it is equal to 18% for Alitalia, the lowest one after
Ryanair. As we can see from the graph British Airways (23%),
Iberia (23%), Lufthansa (23%) and Air France (30%) are
higher.
Even the number of the Employees is the lowest and it
follows the trend of the major competitors. Bicocca’s university data
British Airways and Air France have much higher numbers of
Number of employees - 2015
employees but this is due because of the grater dimension
of the companies.
Even the avarage cost per employee follows the trend of the
competitors beeing even lower than some low cost
company such as Vueling.
The only company that has an avarage personnel cost less
than 10% of Alitalia is Rayanair.
Bicocca’s university data

Average employee’s cost - 2015

Average employee turnover - 2015

Bicocca’s university data Bicocca’s university data

GROUP 8 5
SOURCES:

• https://www.trend-online.com/opinioni/alitalia-buio-oltre-prestito-ponte/3.html
• https://www.statista.com/statistics/702472/block-hours-of-italian-airline-alitalia/
• https://www.anna.aero/2007/07/27/what-would-the-italian-market-look-like-without-alitalia/
• https://centreforaviation.com/analysis/reports/alitalia-lufthansa-easyjet-the-only-declared-bidders-but-only-for-part-of-italys-
flag-carrier-377160
• https://www.linkiesta.it/it/article/2016/12/22/costi-fuori-controllo-cosi-alitalia-e-un-passo-dal-fallimento/32776/
• https://www.startmag.it/smartcity/alitalia-giuricin/
• https://ricerca.repubblica.it/repubblica/archivio/repubblica/1988/05/20/memis-fa-il-check-up-agli-aerei.html
• http://corporate.alitalia.it/it/compagnia/profilo/index.html
• https://www.lavoce.info/archives/47245/alitalia-atterrata-dai-costi-della-flotta/
• https://www.slideshare.net/gandolfodominici/il-trasporto-aereo-case-study
• https://www.slideshare.net/GruppoCLAS/il-mercato-del-trasporto-aereo-in-italia-2013?next_slideshow=1

GROUP 8 6