Two European airlines, financially connected to a third country investment from the United Arab Emirates are in dire straits: Alitalia & Air Berlin. Both carriers had hoped for salvation some years ago, when the helping hand came with obviously unlimited resources. Great dreams were born, dreams of being premium carriers, with frequent connections to the entire world. The current situation however seems more like a crash landing than a smooth flight. Time to take a look at some aspects of this story.

Currently, both airlines can only continue flying with the help of the European taxpayer. Both countries, Italy and Germany, have granted interim credits. Etihad, the initial designated saviour, has disappeared from the scene, without any trace. Many employees fear for their jobs – again! At the same time, a bidding competition for the precious assets of both companies has begun, with some surprises.

All those, who see and praise only the possible benefits of third country investment in our aviation industry, have to admit that the disadvantages outweigh the benefits. Any investment is only sustainable as long as the positive aspects for the investor persist. As soon as this is no longer the case, the investor will withdraw and leave the damage to those that are left behind! It would have been an idea to insist on the rules of ownership and control, when there was still “flesh on the bone” …

The employees were asked several times in the past to “assist” the necessary investments and changes for future growth and high-flying plans with cost cuts and increased productivity. Guess what?  They will be asked to do so again by the future investors. These investors will claim to have saved thousands of jobs, while all they have really done is accelerating the downward spiral in the terms and conditions of aviation jobs! No investment without return!

Last, but not least let us take a look at the bidding process: a former Lufthansa manager is currently in the position of CEO in Air Berlin. Just recently, Lufthansa announced a codeshare agreement with Etihad. And – big surprise – Lufthansa seems to be in the lead, when it comes to taking over Air Berlin. Of course, some raise their voice with concerns over competition in Germany. On the other side, isn’t the European market liberalised, can’t all European airlines offer flights in, out & within Germany? The loudest voice to be heard here comes from Ireland: Mr. O’Leary is outraged. You don’t hear him complain, however, about the situation in Italy, where Ryanair already is the biggest carrier and is now bidding for Alitalia. Any questions?

One thing – unfortunately – is for sure: in the end, the employees will pay the price. Their jobs are at stake; their future is covered by uncertainty! The blatantly failed management of these companies in the past will go unpunished and move to their next top jobs – I’m afraid!

by Capt. Dirk Polloczek, ECA President