Alitalia limps along with Italy

Against all odds, Alitalia is still flying.

Italy's flagship air carrier has been on the brink of collapse for years, but indications are that it should have been grounded by now.

Alitalia said it would run out of fuel on 14 September. Its last euro was spent meeting its end-of-September payroll obligations. Italy's civil aviation authority threatened to withdraw Alitalia's license to fly by 1 October, the same day the airline's last food supplier denied it credit. Scared to book with an airline that might not be around in a day or two, passenger traffic is reportedly off by half.

Yet, improbably, Alitalia flights continue to take off and land, and most staff are reporting to work at airports and offices at more than two-dozen cities around Italy and nearly 75 beyond the country's borders. Asked about the beleaguered airline's future, most say they are resigned to the fact that they could be laid off in a matter of weeks or days, perhaps hours.

The situation was never supposed to come to this. Alitalia's assets - the profitable business route between Rome and Milan and others to points around the Italian tourist Mecca, for example, and valuable landing slots at London's Heathrow - attracted the interest of suitors, and in April a deal was sealed for a merger into Air France-KLM that would have provided much-needed cash and direction for a rudderless company.

But as has happened so often in Italy, excessively partisan politics stood in the way.

Partisan politics is not supposed to be a bad thing. Having two or more viable powers in a political system, each looking out for the interests of their constituents, is the best safeguard against authoritarianism. But when the interests of the power usurp those of the constituencies it becomes untenable.

Silvio Berlusconi took the reins of power in Italy for the fourth time in May, and among his government's first acts was to veto the Air France-KLM deal that came to light under his predecessor - mostly, it seems, because it came to light under his predecessor.

Berlusconi campaigned in part promising he had a secret plan to save the airline without turning to foreign companies like the Franco-Dutch carrier, Europe's largest airline. But five months later, no deal has been signed, and hopes for Alitalia's future again boil down to a foreign deal substantially similar to the one from April but with more concessions from a weaker and more debt-ridden Alitalia.

The foreign seats at the bargaining table are taken by the same Air France-KLM negotiators rejected earlier and Germany's Lufthansa, which at the moment appears to have the upper hand.

A deal may very well be signed. But, without a doubt, the airline becomes less attractive by the day. Unions negotiators have assured that whoever takes over will continue to pay thousands of laid-off workers nearly full salaries for the better part of a decade; Alitalia is now 1.3 billion euro in debt and bleeding cash at the rate of more than €3 million per day; the airline is the defendant in hundreds of lawsuits; its air fleet is ageing.

At one point do those factors begin to outweigh Alitalia's assets, making it more attractive to wait for the collapse and to rush in to fill the vacuum rather than paying to assume the airline's multiple problems?

For sure, there are more issues involved in the negotiations than can be explained in this space, including the fate of Malpensa, Alitalia's second hub outside Milan, the size and terms of layoffs, the amount of money the new partner will provide the cash-starved company, and the number of routes it will shed.

But the central issue remains one that is unfortunately endemic to Italy: political shortsightedness.

In discussing a different issue, a friend and commentator in Milan once described Italian leadership as passengers on a pilotless airplane spiraling toward the earth as they all argue over who gets the window seat. In the current climate, the sight of Alitalia's green-and-red logo plainly visible on the airplane's wing should not come as a surprise.