Alitalia To Cut 2,000 Jobs, EUR€1 Billion Costs

Alitalia said it will cut staff numbers by about two thousand and reduce costs by EUR€1 billion (USD$1.07 billion) by 2019, after its board approved its latest business plan.

The Italian flag carrier said two-thirds of the savings will come from non-staff related costs, but office staff will be reduced by 50 percent, and non-flying positions will be cut by 20 percent. The 2,000 total staff reductions amount to 16 percent of the 12,500 currently employed at the airline.

Alitalia said the savings contained in the 2017-2021 business plan would lead to the airline achieving profitability by 2019. It would then be able to add aircraft to the fleet and launch ten new long-haul routes between 2019 and 2021. The plan includes recruiting up to 500 new crew members by 2019.

“Headcount reductions are a painful but necessary action… These changes are essential if we are to compete effectively in the extremely tough European aviation market.” Alitalia chief executive Cramer Ball said.

Alitalia has been losing over a million euros a day as competition from low cost carriers in Europe hit its business. 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 carrier.