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Negative Workers’ Vote Leads Alitalia to Bankruptcy Proceedings

Italy’s flag carrier Alitalia is set to launch bankruptcy proceedings after employees voted against job and salary cuts, which were part of a rescue scheme to salvage the airline hoping the government would draft an alternative solution.

According to Reuters sources, a shareholder meeting to decide on the next steps is set for May 2. Meanwhile, Alitalia will continue flights for now, it said in a statement.

A positive vote by Alitalia’s employees would have opened the way for a 2- billion-euro capital increase and 900 million euros of new funds, but workers rejected the plan claiming the ailing airline’s labor costs were already among the lowest in Europe.

The Italian government and private investors have repeatedly stepped in to save the loss-making carrier, which has rarely been profitable over its 70-year history. However, on Tuesday, Italy’s industry minister, Carlo Calenda, told public television that spending “billions in public money to support a company at loss… is not a viable option… citizens do not want that”, ruling out nationalization and public funds for the carrier.

The Rome-based airline employs 12,500 people and is 49 percent-owned by Abu Dhabi-based Etihad Airways.

According to Reuters, Alitalia’s board is set to seek shareholder approval to request the appointment of a special administrator who will assess whether the airline should be overhauled or wound up. Failure to find a solution may lead to liquidation.

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