Rome — The future of Italian airline Alitalia was in
doubt on Tuesday after staff rejected a last-ditch restructuring deal,
sparking fears that the carrier may be grounded for good. The government
had warned that there was no alternative to the plan, which called for
1,700 jobs cut and an 8% salary cut.
The company’s coffers are empty, but unions said more than two-thirds of voting employees threw out the proposal which, earlier this month, had been approved by both management and unions, after almost 90% of the airline’s 12,500 employees participated in Monday’s ballot.
Italian government ministers expressed "surprise and regret" at the outcome in a joint statement, saying it put the company’s recapitalisation efforts at risk. "At this stage, as we await the decisions of Alitalia’s current shareholders; the government’s aim is to keep the cost to Italian citizens and passengers to a minimum", they said. Meanwhile, Alitalia’s board of directors met on Tuesday, a public holiday in Italy, "to evaluate the negative outcome of the referendum".
Unions called on shareholders and the government "to avoid any traumatising and irreversible decisions", but Italian press reports said the airline’s directors may quickly ask the state to call in special administrators to prepare a possible takeover or liquidation.
The company is, de facto, controlled by Etihad Airways, which acquired a 49% stake when it saved Alitalia from bankruptcy in 2014. The Emirati airline entered the partnership declaring its intention to transform Alitalia into a leaner operation with industry-leading service standards — both goals it has failed to deliver on, according to industry analysts.
The pressure to find a solution has been intense, with Alitalia’s cash expected to run out this month, leaving its fleet grounded unless the carrier finds emergency funding. Etihad and Italian banks Intesa Sanpaolo and UniCredit have said they would only inject new funds if the unions agree to the new collective labour agreement and cuts. Italian daily La Stampa said on Tuesday that Etihad may try to sell its Alitalia stake to German flagship carrier Lufthansa, but cited no sources.
The Italian government, which acted as a mediator in negotiations, warned on April 18 that a "no" victory would not only be costly but potentially fatal for the company.
Alitalia has been hit hard by competition from low-cost companies and has been accumulating losses for years. The company had previously targeted a return to the black in 2017 but its losses amounted to €460m last year and are forecast to be on a similar scale this year.
Achieving profitability by 2019 would mean six new long-haul aircraft joining its fleet between 2019 and 2021. The airline is planning to launch 10 new long-haul routes between 2017 and 2021 and to recruit up to 500 new crew members by 2019, it said.
AFP
The company’s coffers are empty, but unions said more than two-thirds of voting employees threw out the proposal which, earlier this month, had been approved by both management and unions, after almost 90% of the airline’s 12,500 employees participated in Monday’s ballot.
Italian government ministers expressed "surprise and regret" at the outcome in a joint statement, saying it put the company’s recapitalisation efforts at risk. "At this stage, as we await the decisions of Alitalia’s current shareholders; the government’s aim is to keep the cost to Italian citizens and passengers to a minimum", they said. Meanwhile, Alitalia’s board of directors met on Tuesday, a public holiday in Italy, "to evaluate the negative outcome of the referendum".
Unions called on shareholders and the government "to avoid any traumatising and irreversible decisions", but Italian press reports said the airline’s directors may quickly ask the state to call in special administrators to prepare a possible takeover or liquidation.
The company is, de facto, controlled by Etihad Airways, which acquired a 49% stake when it saved Alitalia from bankruptcy in 2014. The Emirati airline entered the partnership declaring its intention to transform Alitalia into a leaner operation with industry-leading service standards — both goals it has failed to deliver on, according to industry analysts.
The pressure to find a solution has been intense, with Alitalia’s cash expected to run out this month, leaving its fleet grounded unless the carrier finds emergency funding. Etihad and Italian banks Intesa Sanpaolo and UniCredit have said they would only inject new funds if the unions agree to the new collective labour agreement and cuts. Italian daily La Stampa said on Tuesday that Etihad may try to sell its Alitalia stake to German flagship carrier Lufthansa, but cited no sources.
The Italian government, which acted as a mediator in negotiations, warned on April 18 that a "no" victory would not only be costly but potentially fatal for the company.
Alitalia has been hit hard by competition from low-cost companies and has been accumulating losses for years. The company had previously targeted a return to the black in 2017 but its losses amounted to €460m last year and are forecast to be on a similar scale this year.
Achieving profitability by 2019 would mean six new long-haul aircraft joining its fleet between 2019 and 2021. The airline is planning to launch 10 new long-haul routes between 2017 and 2021 and to recruit up to 500 new crew members by 2019, it said.
AFP
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