Alitalia is to file for extraordinary administration following a meeting of the beleaguered airline’s shareholders. Under Italian law, the government will appoint supervisors to turn around the company or order its liquidation, and may provide stop-gap funds to maintain operations. The airline negotiated a €500 million rescue package in 2013, and received a further boost in 2014 when Etihad agreed to take a 49 percent stake in the ailing Italian carrier.
Etihad Airways CEO James Hogan said a “fundamental and far-reaching restructuring to survive and grow in future” was needed.
Hogan said Italy remains an important market for Etihad and the airline will continue to partner with Alitalia within its alliance that includes Air Berlin, Air Serbia and Air Seychelles.
Over the past few years the carrier has struggled against the competition of other budget airlines in Europe like Ryanair and easyJet.
Whatever solution was finally chosen, “the important thing to know is that without an alliance with a large global (airline) company, saving Alitalia could prove very hard”, Calenda said.
However, the Abu Dhabi-based airline would not commit the funding unless Alitalia managed to convince its workforce to accept a plan to lay off 2,000 employees and institute pay cuts of as much as 30 percent over three years.
Alitalia said that its flight schedules “will continue to operate as planned”, and Etihad said that it would “communicate promptly and directly with its affected guests if that situation changes”.
The airline was thrown a major lifeline in 2008, when the state and a consortium formed by a number of Italian companies jumped in to save the national carrier.
Since then it has lost nearly 3 billion euros ($3.3 billion).
The Italian airline had a net loss of €199 million in 2015, the past year for which it has published figures.
The administrators will have 180 days to arrive at a decision with a possible extension of 90 days, Bloomberg reported.
He said the new commissioners handling Alitalia’s extraordinary administration would weigh “all necessary initiatives on the specific issue of the responsibility of company bodies”.