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  • Wednesday, 3 May 2017

    Alitalia airline has six months to restructure or close down

    For a second time in a decade, Alitalia will be managed by a special administrator and will be sold off or liquidated.


    Over the next six months, the company’s flight schedule will continue as planned, while the government will provide a €600 million bridge loan. The company is estimated to be losing €1 million a day. The government appears determined not step in to nationalize the company.
    Over the last decade, the company has cost the Italian taxpayer €7bn. Opinion polls suggest most Italians favour a tough stand vis-à-vis the company.

    A plan put forward by the 49% minority shareholder, Etihad, has been rejected by the unions. The plan envisaged slashing approximately 20% of the company’s 12,500 employees and slashing pay. In return, the Abu Dhabi shareholder would invest €2bn. Etihad is not committed to the investment without restructuring.

    When trade unions rejected the offer, Etihad took its money off the table. Etihad now has a strong negotiating position since there is no alternative bid; it is the Abu Dabi national carrier or liquidation.
     

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