Alitalia: EUR290 million for the brand rights

João Machado

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From noon – Rome time zone – of last Saturday (18) the Alitalia brand has been officially open for bids, under the company’s extraordinary administration. The base price value for the rights of using the classic name has been set at EUR290 million, “plus VAT and taxes”.

The deadline for bids in this first phase of the race for the Alitalia name is October the 4th at 14h00 Rome time, after which, if no bids are set, there will be a second phase where participants can propose offers under the minimum value.

In this scenario, competitors will be given three days after receiving the notice to present their proposals.

The winner will be granted the brand rights by December 31st.

However, it is unlikely that nobody will throw a bid. The first interested party, naturally, is ITA – Italia Trasporto Aereo; the new startup of the Italian State. This one was created because the country could not  put more money into Alitalia due to the European Union’s regulations.  First take-off is planned for October 15th using Alitalia’s aircraft.

At the moment the company cannot use the Alitalia branding, which can create havoc if it doesn’t win the race. While ITA is selling tickets, it is using a provisional branding, including some very familiar traits and fonts in its “provisional” website.

Alitalia’s website…
…and ITA’s new website.

That said, ITA is not able to give everything for a new brand. Its starting capital is at EUR700 million, reports Corriere della Sera, with an upper limit of EUR1.35 billion in State help by 2023, and spending 290 million would eat a huge chunk of the airline’s budget, albeit the airline effectively needs the brand to start the operations in time using Alitalia’s aircraft, the newspaper notes.

However, it is not everybody that will be able to bid for the Alitalia name. The call for bids notes only “individual enterprises or corporations […] having a net worth […] of not less than EUR200 million and holding air transport operating licences or air operator certifications may apply […]”.

This puts all the headlights in other potential bidders who could spoil ITA’s plans. The obvious candidate is Ryanair, the largest operator in Italy; however, Group CEO Michael O’Leary gave a resounding and clear “no” to Corriere della Sera in an interview in Milano two weeks ago.

He recognized the idea passed through his mind, “but just as a disturbing action, to try and make ITA pay more to take the brand”. The outspoken executive said “we are big and famous in Italy, we don’t need that name. Right, Alitalia is among the most famous brands in Italy, but it was always a shitty company. But now we cannot wait for the passage from Alitalia to ITA to come as fast as possible”.

The stylised A has been a worldwide symbol of Italy since the late 60s.

On a brighter note, to the Italian version of the Huffington Post, Italian brand expert Antonio Romano reminded “ITA is a startup, with a series of structural limitations that already make it a difficult debut. To count with a brand whose notoriety is global can give it an important boost”.

Indeed, since the late 1960s, when it was launched, the stylised “A” is a symbol of Italy around the world – and it’s not for nothing that ITA considers burning 40% of its initial capital on acquiring it.

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