Alitalia, or the inability to align regulation with industrial policies

This article aims to frame Alitalia’s crisis in the processes that have characterized the regulatory and industrial policies of the aviation industry over the last twenty years. The reasons that led to Alitalia’s state of insolvency, which have been widely documented, will only be surveyed here. Instead, this work highlights the ‘public policy’ dimension of Alitalia’s failure, that is to say the key strategic decisions, their coherence over time, and the choices made in other countries for similar cases. If the Alitalia crisis is essentially a business crisis that not concern the national airline industry, this does not necessarily mean that the public and regulatory choices that have been made in Italy over the last twenty years have not influenced discernible managerial choices and cases of poor management. The interpretive hypothesis followed in this article concerns the ability to coordinate and integrate regulatory policies and industrial policies. The first section of the article introduces the main theoretical and empirical works on the theme of market-building policies and their implications for civil aviation policy. The second section deals with the story of Alitalia from 1997 to date, focusing on strategic decisions and key policy actors. The last two sections reconstruct European regulatory choices and their implementation in five European countries with a focus on changing ownership structures and the strategies of key market players.