What Happens To Your Ticket If Alitalia Goes Out Of Business?

It was announced earlier today that Alitalia is beginning the process of filing for bankruptcy, which shouldn’t come as a surprise, given what has been happening at the airline so far this year. I’ve been receiving lots of questions from readers regarding what this means for those with tickets on Alitalia, those with Alitalia mileage balances, etc. So I figured I’d address that in this post.

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What do we actually know about the future of Alitalia?

We know that Alitalia is running out of money and options. Alitalia’s board had approved a business plan that would have gotten them more financing, but Alitalia’s employees voted against it, as it would have led to pay and job cuts. The Italian government has assured everyone that they won’t bail Alitalia out, though they will give them a 300-400 million EUR bridging loan, so that they can continue to operate for the next several months.

The way I see it, there are a few possible outcomes:

  • Alitalia liquidates altogether, and parts of the company are sold off
  • Alitalia management and the employees come to a last minute agreement that will see them getting financing
  • Another airline takes over Alitalia to gain market share in Italy
  • Parts are sold off in a way that’s cohesive enough that a “new” Alitalia emerges

I’m sure there are other options as well. The point is that there are lots of directions this could take. I think it’s safe to assume that Alitalia will continue operating for the next several months, though beyond that it’s anyone’s guess what happens.

What’s going to happen to Alitalia miles?

If you have miles directly with Alitalia, there are a few things that could happen:

  • If Alitalia continues to exist in some form, chances are that the miles will stick around as well
  • If Alitalia liquidates, you can say goodbye to your miles
  • If another airline takes over Alitalia, there’s a good chance they’ll honor your miles, though I wouldn’t take it a sure thing, as they’re under no obligation to do so

If you have a big stash of Alitalia miles, I’d do whatever you can to redeem them in the next few months, given the uncertainty. That’s not to say that your miles will be taken away in a few months, but it is a distinct possibility. Even if your miles are honored, there’s no guarantee that the “new” airline will be in SkyTeam, and that you’ll have as many redemption opportunities as you have now.

What’s going to happen to tickets booked through partner airlines?

Did you redeem miles through a partner frequent flyer program for travel on Alitalia? In the event that Alitalia does go out of business, the airline with which you ticketed your reservation should accommodate you on another flight. So if you redeemed Delta SkyMiles, for example, Delta should open up award space on other flights to accommodate you.

However, if you’re flying to a small city served only by Alitalia and not by other airlines, that might be trickier, as they may not have other options. However, for transatlantic flights, you should easily be accommodated.

What’s going to happen to tickets booked directly with Alitalia?

If Alitalia were to liquidate and is unable to operate your flight, then you should be able to dispute the charge with your credit card company. Of course that’s not going to get you to your desired destination at the original cost, but at least you won’t lose the money you spent on a ticket. Some credit cards may even offer further protection in this case, so be sure to consult the benefits offered by your card.

If Alitalia does actually liquidate, odds are pretty good that other airlines will be willing to take over their tickets at a reduced rate. However, this really depends on the circumstances. Personally I don’t see Alitalia liquidating altogether, though I could be wrong.

Is it safe to book tickets on Alitalia?

Only you can decide for yourself. Personally:

  • I’d feel comfortable booking tickets on Alitalia in the sense that I don’t think I’d lose my money; at worst I’d get a refund if they went out of business
  • I feel fairly confident that they’ll be around in their current form for another 3-6 months
  • My biggest concern would be that they greatly reduce their schedule, etc., so if I really needed to be somewhere at a specific time, I wouldn’t feel comfortable booking them

Bottom line

Personally I’m not confident that Alitalia will actually liquidate, but rather my bigger concern right now is the uncertainty. While I think the airline will operate mostly the same for the next several months, it’s anyone’s guess what happens after that. If you’re booking a ticket on Alitalia, the biggest issue is that you may not get where you need to go exactly when you need to go.

However, if you’re using a credit card to pay for your ticket, you should be able to dispute the charge if the airline goes out of business. If you’re booking through a partner airline, they should be able to reroute you should Alitalia go out of business. At the moment my biggest concern is for those who have miles with Alitalia, since it’s anyone’s guess what will happen with those.

Would you feel comfortable booking a ticket on Alitalia right now?

Comments

  1. JFK-FCO-MAD in a month or so. I’m not too worried because I booked with Skymiles and there are a million ways to get to Madrid if I need to

  2. Unfortunately, Alitalia isn’t as valuable as other bankrupt airlines. I can only see LH or very narrowly, EY.

  3. Thank you for this article! I’ll admit I chuckled a little bit when I read this: “My biggest concern would be that they greatly reduce their schedule, etc., so if I really needed to be somewhere at a specific time, I wouldn’t feel comfortable booking them.” If you need to be somewhere at a specific time, I wouldn’t book Alitalia.
    I’d say 70% of the flights I’ve flown with Alitalia always had delays of over 3 hours (to the point where I missed my connection in FCO.) I forget the exact joke but doesn’t ALITALIA stand for always late in take-off; always late in arrival? 😉

  4. Are you sure about the refund if they go out of business? I doubt it since it means not enough cash is available

  5. You should do a little more research. First MilleMiglia is a separate corporation and is not directly a part of the bankruptcy (although there will certainly be indirect effects over time). Second, I would not be so sure about a refund on tickets if the schedule is cancelled (although covered by insurance or credit card insurance benefits in many cases.

  6. I’ve booked Alitalia across the Atlantic in J in a great 1-2-1 product using SkyMiles. Should this option wind up disappearing on me, what’s the next-most-comfortable way across using SkyMiles in J?

  7. @ Joe — Sure, it’s technically a separate company, but it has very little value if not in connection with an airline. If Alitalia were to liquidate, I think it’s safe to assume that the MilleMiglia program wouldn’t be kept around. They have the right to terminate accounts and miles, and I can’t see why they’d want to keep around that liability if there’s no airline or profit center to go along with it. As far as credit cards go, at least in the US, this is a case where you could dispute the charge since you’re not getting what you paid for…

  8. Another interesting question would be what happens if you have a ticket booked with Millemiglia Miles on a partner airline and Alitalia goes out of business…

  9. Yes I agree with Robert. What happens to tickets booked on partner airlines with air Italia miles ? This is always a concern of mine buying lifemiles. What if I use lifemiles to book an ANA flight and avianca goes bust? Will ANA still accommodate me?

    Actually what transaction occurs between airlines when a partner award is booked?

  10. Millemiglia is not only a company by its own, it’s also owned by Etihad, not Alitalia. So there is quite a chance, they will find a solution for the existing accounts. Concerning an airline buying Alitalia, LH has already denied any interest (and I do not see any reason for them to buy, as Alitalia does not fit into the Eurowings group LH is concentrating on) and EY is not allowed to buy more than the 49% they already own due to EU laws. In my opinion anyone buying the whole Alitalia will fail because the employees and Unions still behave like Alitalia still being a state owned airline and just fighting for their old privileges, whatever the costs are. This airline in its actual form will always loose money, whoever is the owner.

  11. I have roundtrip business rickets from jfk-fco in september. should i consider rebooking, as I’m attending a wedding in italy

  12. I have rt biz JFK-NAP (via FCO) in September too, booked via Amex Plat, with no additional travel insurance. Do you know what protection Amex Plat offers, if any?

  13. Could imagine that a 51/49% LH/EY joint venture could go for it.

    In the mid-term this could expand LH european network (Germany, Austria Switzerland + Italy) and still be a Hub for EY to access europe (besides Germany, Austria, Switzerland)

    Nevertheless, this JV could have a better option buying airberlin, without all the Italian issues…)

  14. i have two business class tickets to Rome with AX Memb. Miles transferred to MilleMiglia for the booking.
    What now – I will wait it out, but will I lose these, or would American Express Memb Miles honor the return should they go out of business? Ben – maybe you can address this – with your business connections to AX. I’ve been a member since 1985 – but I have no idea if AX would take back the mileage if Alitalia fails. I thought it was a final transfer? Maybe you can reach out to AX for your blog readers? AX should make an exception to take back and restore miles if this happens….. 200,000 transferred for 2 biz class tickets!!

  15. I (stupidly) booked flights on UM for a trip I’ll be taking next month. Even though SAA was the same price, I guess I’m a sucker for the obscure. Recent news stories say that UM has been losing $3M+ per month and may only have one (or no) functioning aircraft. On the bright side, Alitalia seems like s sure bet compared to that.

  16. Mille Miglia can declare force majeure in the case of a credit event such as bankruptcy so relying on some kind of separate legal entity as a guarantee of getting your miles back is risky in the extreme.

    Alitalia’s 2020 bonds have fallen from 94c on the dollar at the end of 2016 to just 15c today.

  17. I think they will make mince of Alitalia.
    No bid will be made to buy the whole company, but what is called “spezzatino” (stew, in Italian) will take place: valuable assets (owned aircrafts, part of the Millemiglia program, company name and logo and especially the airport slots) will be sold, with the bad company (contracts with employees, leasing contracts for aircrafts, separate branches) simply vanishing.

    I’m convinced that LH wants to buy the good part, because a Rome-New York or, Milan-Tokyo slot is extremely juicy for anyone. And with EY and LH talking so much with each other recently, all this fuss could as well be a way for them to simply get rid of the ballast and operate a new company almost from scratch, when buying the slots and all the other good assets would have normally costed more. EY isn’t losing much, as it already milked the company in many ways during the last two years.

  18. I bought tickets for beginning of August, the ticket reads its operated by Aeroflot. if Alitalia goes bankrupt could i still be able to use the tickets?

  19. I had miles and a paid ticket on Aloha when it filed Chapter 7. I lost the miles, but got a refund on my purchased ticket through my credit card.

    The same day Aloha filed bankruptcy, ATA doubled their fares for the same trip. Then, ATA filed bankruptcy less than a week later.

    For those not familiar with the process, the credit card processor, in my case First Data, was stuck for the amount of the refund. The credit card processor will attempt to get something out of the bankruptcy.

  20. I have two tickets which I paid cash, to fly on ALitalia from Buenos Aires to Rome/Barcelona on July 19th. Do you think I will be able to fly without troubles or, on the contrary, do you think I will have the chance to get my money back?

  21. I bought tickets using Thank you points. I called to check what will happen. The Travel desk at Thankyou points said that Alitalia is not answering phones because they are overwhelmed but she will be emailing me back as soon as she is able to communicate and get an answer. The Travel desk was not even aware of this news.

  22. I have a very serious problem. I travelled from Madrid to Rome by Alitalia. My baggage has been lost. Alitalia wrote me an email on 27 March that the compensation of 1075 EUR would be paid within 30 days. It is 29 May, Alitalia does not reoly to any of my emails nor to the enquiries of the local offices sent to the Headquarter to get sone information about my compensation. Simply they can not pay my compensation and is are willing to reply to me. No baggage, no compensation. Financial departmen is blocked to make payment, even to customers whose baggage had been lost. It is wirrying and unacceptable at the same time.

  23. I have business class tickets on Alitalia for PSA-FCO-JFK in October. I bought these through Alitalia, but I am a Delta Skymiles frequent flyer. If the company changes hands will I still earn my miles on Delta Skymiles? I am not a Millemiglia member, but I am a Delta AX Platinum card holder and Delta Gold Medallion.

  24. I’ve booked Alitalia tickets to go to my brother’s wedding in September near Brindisi. We’re flying from Heathrow via Milan on the outbound, Rome on the inbound. As it’s a wedding (and a close family member at that!) we absolutely have to get there. It feels like there’s a lot that could potentially go wrong, especially as the flight isn’t direct. I guess I just have to wait and see what happens and be ready to book a flight with another airline if the Alitalia schedule changes – but what I’d prefer to do is cancel the Alitalia flight booking now and make the decision about who else to fly with with plenty of planning time! There’s no way I can do that though is there? One of our flights I booked with Alitalia directly, the other three through a budget online travel agent.

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