Alitalia is the best example of how wrong could be to keep alive a public company as a flag carrier. That implies disastrous management which generates an economic burden to the taxpayers, in a competitive environment where mostly non-democratic governments maintain the obsolete tool of the flag carriers while liberalization is the norm in the rest.

Now, after a long run of trying to secure investors, Alitalia has officially closed its doors. Italy’s national carrier Alitalia has had a rocky past full of financial struggles, employee strikes, and other damaging events, forcing it to make the decision to cease operations on October 15 after 74 years of service. Alitalia as a brand began in 1946, one year after World War II ended, first flying in 1947 within Italy and quickly expanding to other European countries and even opening intercontinental routes to South America. The full name of the airline was Italian International Airlines, a joint effort between the United Kingdom through British European Airways — a precursor to British Airways — and the Italian government.

Following a merger with Italy’s other airline, aptly named Italian Airlines or Linee Aeree Italiane, in 1957, Alitalia – Linee Aeree Italiane became Italy’s top carrier. As Europe returned to normalcy following the war, so did Italy and the 1960s became a pivotal decade for both the country and its airline as the 1960 Summer Olympics would be held in Rome. The year saw Alitalia carry over one million passengers, introduce jets into its fleet, and move to a new home at Rome’s Fiumicino Airport. Alitalia was the first European airline to transition fully into the jet age and continued the switch with more wide-body aircraft

Despite rising traffic throughout its history with Italy being a popular European tourist and leisure destination, the airline struggled with profitability. As a state-owned airline, Alitalia could always depend on the government to keep it flying, until the European Union stepped in and forbade financial support in 2006. The 2000s then saw serious discussion into Alitalia’s future with the Italian government wanting to sell its stake in the airline. The airline was opened for bidders in 2007 but yielded no results. Air France-KLM Group, the parent company of Air France and KLM as well as several smaller European airlines, then offered to buy the struggling airline but couldn’t get labour unions on board and the deal collapsed.

The Italian government, not wanting to lose its flag carrier, continued to prop up its airline via emergency loans in violation of European Union rules. The third attempt in two years to sell the airline came after the Air France-KLM Group deal collapsed with an investors group forming the Compagnia Aerea Italiana to purchase the airline, despite heavy pushback from labour unions. This Alitalia began operations in 2009, with Air France-KLM soon coming back into the picture taking a 25% stake from CAI. The new airline quickly began differentiating itself from its former self, leasing aircraft instead of purchasing them with the fleet consisting of the Airbus A330 family. It wasn’t long before Alitalia was plagued with issues ranging from union strikes to underperforming subsidiaries and even a sting operation that saw Alitalia employees arrested for theft, according to contemporaneous news reports. With bankruptcy looming in 2013, Alitalia secured another bailout with help from the government that highlighted the need for restructuring.

Alitalia saw a new investor in 2015, Eithad Airways, which would take a 49% stake in the airline and Alitalia – Compagnia Aerea Italiana became Alitalia – Societa Aerea Italiana. With a new investor in tow, Alitalia began cost-cutting measures but facing a backlash from employees due to planned job cuts, the airline began bankruptcy proceedings and the government announced Alitalia would be auctioned. Meanwhile, another airline was positioning itself to become the new Italian flag carrier, the aptly named Air Italy. Rebranded from Meridiana, a regional Italian airline, Air Italy was jointly owned by private companies Alisarda and Qatar Airways. The airline chose Milan as its main hub ceding Rome to Alitalia. Long-haul flights from Milan to New York began in June 2018, with expansion to Asia happening soon after.

Affected by the grounding of the Boeing 737 Max and without the Italian government as a benefactor, Air Italy closed up shop in early 2020, giving back full control of Italy to Alitalia. While Air Italy was getting its start, the Italian government would once again seek outside investors with European, North American, and Asian airlines expressing interest in Alitalia. Among those interested were UK low-cost carrier EasyJet, Irish low-cost carrier Ryanair, the Lufthansa Group, Delta Air Lines and China Eastern Airlines as well as Italian railway group Ferrovie dello Stato Italiane.

One after the other, the airlines dropped their interest, and ultimately, the Italian government re-nationalized the airline on March 17 during the coronavirus pandemic. Despite bailouts from the state, the pandemic and subsequent lockdown of Italy took the ultimate toll on Alitalia, forcing it to make the decision to close the airline and launch a new one. As of August 25, the airline stopped selling tickets.

Talks between the European Commission and Italy over Alitalia and ITA began in March 2021, with Rome designating 3 billion euros ($3.6 billion) to establish the new flag carrier. Initially, ITA was slated to begin operations in April 2021, but lengthy discussions between Italy and the European Commission delayed its launch. Part of the negotiations focused on confirming ITA’s independence of Alitalia to ensure it did not inherit the billions of debt the old carrier owed to the state. Talks also included asking ITA to forfeit half of Alitalia’s slots at Milan Linate Airport, which the airline was unwilling to do. ITA determined giving up that many slots at Linarte would be too big of a loss and proposed forfeiting slots at Rome Fiumicino Airport as a compromise. At the end of the discussions, negotiators agreed to allow ITA to keep 85% of slots at Linate and 43% at Fiumicino. Also under negotiation was Alitalia’s brand and its loyalty program, MilleMiglia. The European Commission said ITA would have to give up both.  Under European Commission rules, MilleMiglia cannot be bought by ITA and must be put out for public tender, meaning another airline or entity outside the aviation industry can purchase the program. There are an estimated five million MilleMiglia miles that customers have not been able to use. However, ITA can bid on Alitalia’s brand, which has done in public tender and has paid 90m euros to become the owner.

ITA begins operations on October 15, the day after Alitalia’s last flight. The new airline secured €700 million ($830 million) in funding, which will help it purchase some of Alitalia’s assets. The successor plans to purchase 52 of Alitalia’s aircraft, seven of which are wide-body. By 2025, the airline expects to have 105 aircraft in its fleet and earn over 3.3 billion euros in revenue. As far as the over 11,000 Alitalia workers, they will be considered for employment with ITA. The successor plans to hire 2,750-2,950 people this year and expects staff numbers to grow to 5,550-5,700 by 2025.