Delta Made an Offer to Buy Bankrupt Alitalia
Delta Air Lines wants to buy Alitalia, the bankrupt, money-losing Italian flag carrier that's up for sale — or at least a part of it.
According to Italian news agency Ansa, the government received on Wednesday three separate offers to buy Alitalia. One came from Delta, another from UK-based low-cost airline EasyJet, and a third from state-owned Italian railway company Ferrovie dello Stato or FS.
In response to a request for comment on the bid, a Delta spokesperson emailed TPG saying only that "We continue to explore ways to work with Alitalia and maintain our partnership in the future."
Alitalia used to be the largest Italian airline by passenger numbers, but it has lost that title to low-cost Ryanair, which carried 36.2 million people from Italian airports last year to Alitalia's 21.7.
Delta would probably want to take over long-haul flights only: Alitalia has a network of routes to the US and South America plus a few Asian destinations that could be of interest to a large international airline. Its recently revamped long-haul business class is a solid product, configured in an industry-leading 1-2-1 layout offering aisle access to all seats. It flies a small but relatively modern long-haul fleet of 26 airplanes — 14 Airbus A330s and 12 Boeing 777s — all featuring business, a true premium economy and coach.
It's also a member of the SkyTeam alliance, offering seamless mileage earning and redemption to Delta's SkyMiles members.
However, Delta wouldn't be likely to own the majority of Alitalia shares. Under European Union law, if a non-EU entity such as Delta owns more than 49% of an airline, that airline is no longer considered an EU subject — and therefore loses its rights to open any route it wants between the US and the Union's 28 member nations, under the Open Skies treaty between the US and the EU. Instead, it would have to negotiate bilaterally the rights to every route.
According to scenarios floated in the Italian media, Alitalia could be sold in two parts. One would be a long-haul operation run (but not owned outright, because of those EU rules) by Delta, and a short-haul business owned and run by EasyJet, which would face no legal hurdles since the United Kingdom is part of the European Union. Even after the UK leaves the EU, if Brexit happens as planned, EasyJet would retain its EU rights since it has set up a company based in the Union to continue operating as a European carrier.
Alitalia is also saddled with a 900 million euro loan from the Italian government it got last year to continue flying, which it could not have done without since Abu Dhabi-based Etihad Airways, which owned 49% of the airline, decided to pull out after workers rejected a recapitalization plan because it also involved job cuts.
Alitalia now has to repay the loan, with interest of at least 100 million euros, by Dec. 15, something which it is no position to do. According to Italian newspaper La Repubblica, which cited a government official, the loan term will likely be extended. European Union rules forbid state aid to airlines since it would alter competition in the free market, so the money the Italian government gave Alitalia must be repaid in order not to be considered an illegal handout.
This story has been edited to include that EasyJet would remain a European Union carrier even if the UK leaves the EU.
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
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- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
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Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.