Alitalia stops selling tickets, prepares to shut down and be replaced

Italian national carrier Alitalia announced Tuesday Aug. 24 that it would stop issuing tickets and will effectively shut down operations as it prepares to dissolve and be replaced by a new airline.

The new carrier, Italia Transporto Aereo (ITA), plans to begin operations on Oct. 15, 2021, according to the airline. Alitalia will consequently stop selling tickets for flights on or after that date, and will allow passengers with tickets for later to reschedule or request a refund.

Passengers with award tickets for travel after Oct. 15 booked through the airline's frequent flyer program, MilleMiglia, can either change their dates of travel (including booking on SkyTeam partners) or cancel their flight and get their miles redeposited.

It was not clear, however, what will happen to unspent MilleMiglia miles after ITA takes over on Oct. 15. ITA is a new airline, rather than a post-bankruptcy reformation of Alitalia. Under European Commission rules, the new airline was unable to take over Alitalia's frequent flyer program, although the airline will buy some of Alitalia's other assets

While there is a possibility of another entity purchasing MilleMiglia and operating it for ITA passengers — similar to the setup between Aeroplan and Air Canada — there is no guarantee. Consequently, it could be wise for those holding MilleMiglia miles to try to burn them before Oct. 15.

ITA plans to launch as a significantly leaner operation than Alitalia, which has been in bankruptcy since 2017, and was nationalized by the Italian government in March, 2020 as the COVID-19 crisis threw the airline industry into turmoil. The newcomer will have fewer slots at Milan's Linate Airport (LIN) and at Rome's Fiumicino Airport (FCO) than Alitalia previously held. Still it says it plans to eventually expand.

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Although ITA will buy the old Alitalia brand and livery, and will have the Italian government as its largest shareholder, it plans to avoid the mistakes that led the former flag carrier to years of bankruptcy and an eventual collapse. The new airline plans to have fewer employees, a smaller and more efficient fleet, and use fewer slots.

It's unclear, however, how resilient the new airline will be to competition from Europe's low-cost carriers such as Ryanair and EasyJet, which have put heavy pressure on the continent's mainline carriers. While ITA plans to fly long-haul routes, international travel remains severely depressed due to the pandemic, along with business travel, which could severely impact the feasibility of launching those routes. And the carrier it's set to replace — Alitalia — suffered through numerous reorganizations during its hugely unprofitable modern era. Now, it remains to be seen if successor ITA can chart a different course. Stay tuned ...