New Train Services From Rome to Milan Threaten Alitalia

Alitalia, Italy's struggling airline, is all set to be revived-but new problems may be in store for the carrier. Easyjet is now offering 4 flights a day from Rome to Milan, one of Alitialia's most popular routes. And trains may pose even greater competition. On December 15th a section of new track between Bologna and Milan will cut out half an hour of the four hours it takes to get to Milan from Rome. And another company, the privately owned Nuovo Trasporto Viaggiatori, is opening a new high speed train service between major cities in Italy, including Rome and Milan. Alitalia is certainly facing some daunting competition. Read more about it in the Economist.

Alitalia Looks to Lufthansa

Alitalia is still in trouble. Rumor has it that they are looking to Lufthansa, the German airline, for a partial buyout (the Italian government owns almost half of the airline and it cannot sell). Air France-KLM was blocked by unions from a buyout earlier this year, so it's hard to predict what will happen. Lufthansa thinks that Alitalia has too much debt. In the meantime, Alitalia is losing money every day, is cutting thousands of jobs, and has trouble buying fuel. It hasn't cancelled any flights yet...but be aware when booking Alitalia that things are precarious. Paolo Scaroni, the chief executive of ENI, an Italian oil company, told La Repubblica that he would not sell oil to Alitalia on credit "not even if Berlusconi or the pope asked me to."

Alitalia in Trouble

Dozens of articles in the past few weeks have highlighted the trouble that Italy's airline, Alitalia, is facing. Because the EU has ruled that governments can no longer fund private airlines, Italy has been forced to pull its funding from Alitalia. This has left Alitalia with not nearly enough cash to run for more than a few more weeks. The newly reelected Prime Minister, Silvio Berlusconi, has vowed that he will make saving Alitalia a priority, but until another company comes along to bail them out, you should definitely avoid making any reservations on Alitalia. See Budget Travel for some tips on making the most of your reservation if you already have booked with Alitalia for this summer.