Alitalia is shutting down
Alitalia will cease to exist from 15 October 2021. Photo: Alitalia.

The Italian government will shut down its terminally unprofitable flag carrier Alitalia next month, replacing it with a brand new airline.

ITA, which stands for Italia Trasporto Aereo, will take over many of Alitalia’s old aircraft and routes from 15 October 2021. But, determined not to repeat the same mistakes as its predecessor, ITA will have fewer aircraft, slots and employees than Alitalia.

Alitalia will continue operating flights until 14 October 2021, but last month stopped selling tickets for travel beyond this date. Alitalia flights already booked for travel after 15 October can be changed free of charge to a date prior to Alitalia ceasing operations, or alternatively refunded. Destination changes are also possible.

Similarly, award tickets booked using Alitalia MilleMiglia miles for travel beyond 15 October can be changed to a new date prior to then, or cancelled for a refund of the miles paid. This includes award tickets for travel on Alitalia and its partner airlines, which include Virgin Australia.

But it’s not yet clear what will happen to Alitalia’s MilleMiglia frequent flyer program, nor its membership of the SkyTeam alliance. Officially, as ITA will be a new airline, it will not automatically become a SkyTeam member when it begins operations on 15 October 2021. But discussions between ITA and SkyTeam are ongoing.

It’s also unclear what will happen to the MilleMiglia loyalty program. The European Commission has ruled that Alitalia Loyalty, which runs MilleMiglia, must be sold to the highest bidder through an open and transparent tender process. But ITA will not be allowed to bid. It remains to be seen if a new third party will take over the program and continue operating it in its current form under a partnership with ITA, or whether ITA starts a brand new program of its own.

The current edition of MilleMiglia was due to expire on 31 December 2021 anyway, with miles valid only until 31 January 2022.

Alitalia had been in bankruptcy since 2017 and was renationalised by the Italian government in March 2020.

What does this all mean for Virgin Australia Velocity members?

Alitalia is currently a partner airline of Virgin Australia. Given Alitalia will no longer exist after 15 October 2021, one can only assume its partnership with Velocity Frequent Flyer would also end from this date. But as yet, Velocity Frequent Flyer has not given any update on this and was unable to provide any further details to us.

Velocity partner airline redemptions have been paused since April 2020. But the Velocity website continues to promote the ability to earn Velocity points and status credits when flying with Alitalia.

Velocity also advertises that Silver, Gold and Platinum members can receive an additional luggage allowance, priority check-in and priority boarding when flying with Alitalia. Although, some AFF members have complained in the past that Alitalia didn’t honour all of these benefits anyway. Velocity Gold and Platinum members lost access to Alitalia’s lounges last year.

Velocity Gold & Platinum members already lost access to Alitalia's airport lounges in 2020
Velocity Gold & Platinum members already lost access to Alitalia’s airport lounges in 2020. Photo: Alitalia.

We’re expecting to hear a further update from Velocity on its partnership with Alitalia – and international partner airline redemptions generally – over the coming months. The best case scenario for Velocity members would be that Virgin Australia signs a new partnership with ITA, the airline replacing Alitalia. But there’s no guarantee that this will happen.

Alitalia is currently the only Virgin Australia partner airline operating flights within Europe. Virgin Atlantic, which exclusively operates long-haul flights from the UK to destinations outside of Europe, is Virgin Australia’s only other current European partner airline.

Join the discussion on the Australian Frequent Flyer forum: Alitalia to shut down on October 15

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]