Alitalia is to enter “extraordinary administration”, the Italian airline announced on Tuesday, May 2, after a meeting of its shareholders that include Italian financial institutions and Etihad Airways, which holds 49 percent of its shares.
The decision came after the airline’s unions rejected a restructuring and refinancing industrial plan, which, according to reports, involved cutting 1,700 jobs the company’s 12,500 member workforce and pay cuts of up to eight percent.
“Italian shareholders and Etihad, based on the strong potential growth of the company, and on an industrial plan which included a structural cost reduction of which two thirds were not related to labor costs, were committed to recapitalise and finance the plan with EUR 2 billion. This commitment was subject to an agreement with the trade unions, which was rejected by the employees in a referendum,” Alitalia said in an announcement.
According to the announcement, Alitalia’s shareholders noted with “deep regret” the outcome of the referendum among the employees. “The negative vote has determined the inability to implement the relaunch and restructuring of the Company,” the airline said.
“The board of directors… having acknowledged the serious economic and financial situation of the company, of the unavailability of the shareholders to refinance, and of the impossibility to find in a short period of time an alternative, has decided unanimously to proceed with the filing for ‘amministrazione straordinaria’ (extraordinary administration) in compliance with Italian law,” Alitalia said.
According to reports, Italy’s Ministry of Economic Development are to appoint administrators to decide whether the company has a viable chance of survival, or whether it should be liquidated.
Alitalia said in its announcement that flights would continue to operate as planned.
New direct Athens-Tel Aviv service
In Greece on Tuesday Alitalia launched all year round direct flights between Athens and Tel Aviv.
The Athens-Tel Aviv service will depart from Athens International Airport daily 7.30 am and will land at 9.20 am (local time). The return flight from Tel Aviv will depart daily 7.50 pm (local time) and will land in Athens Airport at 9:55 pm. The route will be operated with an Airbus 330 aircraft.