The free market destorys Alitalia

The Italian airliner Alitalia is about to go bankrupt again. This is not the first time the airliner went into financial problems. Back in 2008, the old Alitalia – Linee Aeree Italiane was declared bankrupt. A new airliner under the name Alitalia – Compagnia Aerea Italiana was founded by a bailout of the Italian government. However the big liner cannot make a profit. Since its foundation Alitalia has been losing money each year. At fault is the management and the fact that cow cost carriers have conquered the Italian airline market. Ryanair and Vueling have outmaneuvered the national airline of Italy and now bankruptcy is imminent yet again!

Alitalia – Linee Aeree Italiane first started with flying in 1946 after world war 2. Its first name was Aerolinee Italiane Internazional, the name Alitalia was introduced a year later in 1947. Like Sabena of Belgium, Alitalia was never a profitable airliner. By capitalist standards the company should have been bankrupted a long time ago. But Alitalia was the face of Italy and the government decided to intervene every time. Capitalist commentators claim that workers and the government are to blame for the financial troubles. Labour unions have bravely fought against the decisions of the management to cut wages and fire workers. Revolutionary socialists always stood with the workers of Alitalia, who are not to blame for the fact that the management is unable to make the company profitable!

Many Italians will be shocked when their airliner will go bankrupt. But this is not something which comes unexpectedly. Alitalia suffers from killing competition by low cost airliners like Ryanair and Vueling. Airliners who operate much cheaper because they enforce totalitarian control over their workers. We all know how Ryanair forces its pilots to fly with just enough fuel to make it from point A to point B. Wages at these low cost carriers are much lower then those of Alitalia. This is why tickets are much cheaper. In the past the government granted loans and capital injections to prevent a bankruptcy. But the European Union forbade Italy from helping their doomed airliner. Their logic is simple: If Alitalia cannot survive in a free market, then it should go down. This is the same EU that enforced brutal austerity on the people of Greece!

Revolutionary socialists see a bigger picture. We reject capital injections or nationalizations under capitalism. We do not want Italians to pay for the loses of one company only to see it privatized again. Our alternative is to nationalize Alitalia under socialism. This means complete expropriation of the owners and no privatization in the future. This will be rejected by the EU, who will never agree to any state owned airliner. In a capitalist economy it would also not be possible to do this. Therefore Italy needs socialism!

Capitalist competition is not healthy and in the end it destroys those who cannot survive. This killer logic is what happened to famous airliners like Pan American Airlines, Sabena and Swissair. Supporters of the free market claim that because of competition the prices for flying are now much lower. Indeed, but at what cost? There are over 11.000 people working for Alitalia. If the company goes bankrupt these workers will be on the streets. Capitalist commentators say that the pilots, flight attendants and workers should then accept cuts to their income and pensions. Because that will keep the airline ”healthy”. So in order to save their jobs, they need to accept the same work conditions as those who work for low cost carriers like Ryanair. Let us remind you how greedy and capitalistic the management of Ryanair is. Pilots are forced to fly with a minimum of fuel and flight attendants are told to pay for their own uniforms. There is also a culture of fear were bosses use intimidation against those workers who are critical!

In 2008, Alitalia – Linee Aeree Italiane went bankrupt after losing money for years. Because the government had kept a big share in the airline, prime minster Silvo Berlusconi decided to save the image of Italy, by selling parts of the company to his wealthy cronies. A group of rich capitalists was enticed into taking over the healthy portions of Alitalia, leaving its debts to the Italian taxpayers. After the government paid millions of euros, a new company was set up called Alitalia – Compagnia Aerea Italiana. Many hoped that this fresh start would be positive. Arab carrier Etihad Airways paid a lot of money to get 49% of all the shares. In the end they were very disappointing that the workers of Alitalia rejected the austerity package. Since trade unions are not free in the United Arab Emirates, the owners of Etihad are not used that working class people stand up against labor cuts and worsening work conditions.

Alitalia has another competitor, railroads. Two years ago a super-fast rail system opened between Milan and Rome. The capitalists who own these rail roads offer seats at the same prices of the low cost carriers. In a nation were the average income is 1.700 euros a month before taxes, it is no surprise that many choose cheaper ways of travel. It is a sad reality that the free market has destroyed Alitalia. 11.000 workers will soon face the streets if the company is not saved. This time there is no hope of government intervention as the European Union forbids any capital injection!

Are consumers to blame? They are the ones who choose to fly with Ryanair and Vueling instead of Alitalia. Revolutionary Socialist Media thinks not. The unregulated capitalist system is to blame. In the past, many state owned airliners had a monopoly on flights. Pan American Airlines was able to stay in the air because the airline market in the USA was regulated, until Jimmy Carter came with the deregulation act of 1978. Exposure to competition led to heavy losses and conflicts with labor unions for a number of carriers. Between 1978 and mid-2001, eight major carriers (including famous names like Eastern, Midway, Braniff, Pan Am, Continental, Northwest Airlines, and TWA) and more than 100 smaller airlines went bankrupt or were liquidated!

The establishment media in both Italy and the European Union will put all the blame on pilots and workers. They refused austerity, they refused pay cuts and are to blame for the collapse of Alitalia. Working class people at the company however are not to blame. We say that the capitalist system is responsible. The system of unregulated capitalism that allows for this madness. Ryanair and Vueling are not Italian airliners, Ryanair is Irish and Vueling is Spanish. But because of the free market economy in the European Union, these low cost liners are able to compete in any EU country. Revolutionary socialists reject this common market idea as not all European nations are equal in labour costs nor in social security. Nationalists would call for protectionism, a system that protects indigenous businesses against foreign competition. The far-right National Front in France is very much in favor of protectionism. Silvo Berlusconi also played on protectionist feelings during his times as prime minister!

In the end the only class who wins is the capitalist class. Workers lose far more then just a job. The owners of Alitalia are not poor, Etihad Airways is a company that is cheating the market because it has access to subsidized oil. While carriers like Alitalia have to pay market prices for their jet fuel, Etihad Airways is given subsidized fuel by the government of the United Arab Emirates. Also the companies from the middle east operate on slave labor. Many Indian workers from India work for airliners like Etihad Airways on very low wages. Although billions of euros are made, Indian workers are paid on salaries common in India. Two years ago, many capitalists in the United Arab Emirates complained about the rise in labor costs. Workers from India were given an increase in their salary at home. This meant that Arab businesses who hire Indians had to pay this increases too. An average income of 1.200 ED (Emirati Dirham) was normal, but now the Arab capitalists had to pay over 1.600 ED a month if they hire a worker from India. For the record: 1.600 ED equals 400 euros or 430 U.S dollars!

Capitalist logic is simple. There is no room for Alitalia in a European market dominated by low cost carriers and three major airlines. Because we have now:

  1. Air France/KLM – A company that owns Air France and Dutch Royal Airlines (KLM)
  2. The International Airlines Group which owns British Airways, Vueling and Iberia of Spain
  3. The Lufthansa Group that owns Lufthansa, Swiss International Air Lines, Austria Airlines, Brussels Airlines and many charter airliners like Eurowings and Edelweiss Air.

This is the result of unregulated capitalism. Today there are only three major airlines left in Europe. These three dominate the market and it becomes more difficult for others to compete with them. At the same time, the low cost carriers keep growing. Ryanair is no longer a small Irish carrier. It has grown to 384 airplanes with 192 destinations. The Spanish Vueling has over 108 planes, the same amount as Alitania. Although the EU claims to protect ”free and fair competition” we all know that behind our backs, price fixing is done. Because it is the nature of capitalists to get richer and richer at the expense of others. Air France/KLM, International Airlines Group and Lufthansa Group are not even to blame for their greedy nature. We cannot expect from them to behave like human beings. Because the drive for profiteering will always come before the interests of the people who work at these enterprises!

Soon another symbol of the European airlines industry will fade away. Americans seen it too with the demise of airliners like Pan American Airlines, Eastern Airlines and Trans World Airlines. Those who cannot compete on the market are doomed to die. The brave workers of Alitalia who always fought for their jobs and wages, will in the end lose the battle. Because in a system build for competition and greed, they must either obey the rules of the market (accept austerity, lower wages and higher work load) or lose their jobs. This is why revolutionary socialists stand for a different economic system. A socialist system based on planning of the economy for people and not for the sharks of corporate Europe and the world capitalist class!


A sad end for the Italian airliner