Alitalia Files for Extraordinary Administration

TIN news:  Italian flag-carrier Alitalia has announced it has filed for ‘amministrazione straordinaria’ (extraordinary administration) after workers rejected its restructuring plan last week.

The plan, which was tentatively agreed between the company and trade union representatives, called for 980 redundancies and an 8% pay cut with shareholders providing €2 billion ($2.2 billion) of recapitalisation funding in return.  But following rejection of the deal by the workforce, the carrier’s directors convened on May 2 and agreed to file for administration.  Alitalia is owned by a collection of Italian investors and Abu Dhabi-based Etihad Airways which holds 49% of the shares in the carrier.

The directors’ statement read: “The negative vote has determined the inability to implement the re-launch and restructuring of the company.  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 labour costs, were committed to recapitalise and finance the plan with €2bn.

“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 the Italian law.”

The airline says its flight schedule will continue as planned.