Public Service Obligations Sardinia

On March 12, Air Italy offered to fly from Olbia to Rome and from Olbia to Linate (and vice versa), without financial compensation.

We did this because despite the loss of the initial phase of the PSO Tender, it was vital that we did everything within the Tender rules to protect our staff of over 500 people and the investment made over the last 50 years in the service of Sardinia.

Flying the PSO routes without compensation meant making major strategic changes to our network and accepting a significant financial loss because the PSO funds exist for a reason: flying the routes under the terms and conditions as laid down by the Region Sardinia is not financially profitable, and so to ensure mobility and access to Sardinia, the Regione subsidises the routes.

However, our shareholders agreed to accept and underwrite the significant financial loss of flying without compensation because of the aforementioned need to protect our staff and their livelihoods.

Then on April 8th, Alitalia also offered to operate the Olbia routes without compensation.

As we all know, Alitalia is a company in extraordinary administration, and its sale has just recently been extended again because a viable partner(s) has not been found. How therefore it could offer to fly the Olbia PSO routes without compensation – given that the routes are not profitable without it – remains a mystery. Interestingly enough, Alitalia only offered to fly the Olbia PSO routes without compensation, remaining happy to accept the Cagliari and Alghero PSO funds on routes which are far more profitable.

At this stage given the developments, we faced the prospect of having to fundamentally review our Olbia operations, considering every possible eventuality.

On April 15th, President Christian Solinas convened Air Italy and Alitalia to try to find a solution. Several options were tabled, including the sharing of the routes, but none of the proposed solutions were financially sustainable, each resulting in fact in an even more negative position for Air Italy than that which had already been proposed by us in March – meaning we had to walk away.

On April 17, the Ministry of Transport and the Regione Sardinia once again requested Air Italy and Alitalia to jointly seek a solution to overcome this situation.

Over the following weeks, an outline agreement was discussed and developed in which Alitalia would fly the routes until the end of May and support with the reprotection of Air Italy’s passengers, after which Alitalia would exit and hand over the routes to Air Italy, and Air Italy would support with the reprotection of Alitalia’s passengers.

This outline agreement was drafted, revised by both sides and was awaiting signature.

However, a few hours before the expected conclusion of the agreement, Alitalia reverted saying it was no longer possible and that they wished to go back to the original proposal of a shared approach to the routes. This was, is, and will be, simply not possible.

We at Air Italy have gone out of our way to try and explore every possible option.

For more than two months we have accepted serving the routes at a significant financial loss. We have reserved and cancelled and reserved and have to cancel again wet lease aircraft, damaging our partnerships in the process.

We have booked and re-protected our passengers using all available options. And we have attended every meeting called and yet still an equitable solution is beyond us.

Exactly one month ago we said that the solution adopted by the Regione Sardinia in concert with the Government was not a solution, but a farce, and one that did not solve the question of Territorial Continuity. Instead, it puts it at risk, and simultaneously risks passengers travel plans, the territory, the personnel of Air Italy and the Sardinia tourism industry.

Today sadly that statement still stands.

Added to this, we are disillusioned and extremely disappointed with how this situation has been handled by the Regione Sardinia and the Government.

As it stands, this is the end of the road for us, and we are now forced to cancel the two Olbia routes and will continue to protect those passengers who might still be booked on flights between Olbia and Milan Linate and between Olbia and Rome Fiumicino.

There is nothing more that we can do at this time. We have been holding aircraft waiting for a resolution, but unfortunately now those aircraft are being released and all related agreements will be cancelled.

In addition, due to the mismanagement and financial repercussions of this ridiculous state of events, we will be proceeding to assess the possibility of claiming compensation and will be asking the European Commission to investigate this debacle.

Most importantly though, our primary focus continues to remain the same – our staff.

Because of this mismanaged situation and lack of resolution which has now dragged on for months, returning full circle to the start, the fate of our 500-plus staff and their families and the associated businesses in Sardinia depends on the decisions of the Region Sardinia and the Government.

Today our people and the families deserve honest and direct answers from those who are responsible for this mess.

They must now move immediately to find a suitable solution to protect the livelihoods of our 500-plus staff and their families in Olbia, and the vital economic and social contribution that they make to the island of Sardinia.