Alitalia In Administration, Govt. Approves Loan
Alitalia has applied for special administration after employees last month voted to reject the airline’s latest rescue plan.
Under the “amministrazione straordinaria” (extraordinary administration) the Italian government has appointed three commissioners to manage the airline. It wants the commissioners to preserve the value of the company either through restructuring or by a full or partial sale.
The government has approved a EUR€600 million (USD$655 million) bridging loan to allow the carrier to continue operations while a solution is found. Alitalia said flights will operate normally during administration.
Alitalia’s largest shareholder Etihad said it would not invest further in the ailing carrier “without the support of all stakeholders.”
Under the airline’s latest business plan, staff numbers were to be cut by about two thousand and costs reduced by €1 billion ($1.09 billion). Two-thirds of the savings were due to come from non-staff related costs, with the plan leading to profitability by 2019.
In a vote last month, staff rejected the business plan, expecting the company to be put into administration and hoping for a less drastic outcome than the proposed cuts.
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 Italian carrier.