ALERT: Alitalia Files for Bankruptcy (May 1, 2017)
Monday, May 1, 2017
Alert – American Airlines Flight Makes Emergency Landing in Chicago
Today Alitalia (the national airline of Italy) entered bankruptcy proceedings. Alitalia is a member of SkyTeam, which includes airlines such as Air France, Delta and KLM. Therefore, agents seeking to mitigate client concerns may wish to book Alitalia using codeshare partner plates. In a statement, the airline said:
“Alitalia’s shareholders meeting, convened today, 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.
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.
The Board of Directors, which convened after the shareholders meeting, 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.
Alitalia’s flight schedule will continue to operate as planned.”
The company reiterated its commitment to flight schedules in a Facebook post:
Bloomberg reports:
“Alitalia, which was mainly backed by Abu Dhabi-based Etihad Airways PJSC, last week said it had exhausted all options to stay solvent after workers nixed a 2 billion-euro refinancing plan involving 1,600 job losses. The cuts to its workforce of 12,500 employees may be even deeper under administration, as a rescue appears unlikely. Etihad, which owns 49 percent of the carrier, said it won’t extend additional funding.”
According to the New York Times:
“Alitalia, which sustained losses for most of the last decade, had started to become profitable again in recent years after the government negotiated a 2014 rescue by Etihad, a carrier based in Abu Dhabi. Etihad took a 49 percent stake after Alitalia had stumbled following a rescue operation by Prime Minister Silvio Berlusconi in 2008.
The Middle Eastern airline made new investments and financed a revision of Alitalia’s business plan to compete better with low-cost carriers. But losses started to mount again in 2015, to nearly €200 million, as Alitalia failed to ward off fierce competition from low-cost airlines, and terrorist attacks in Europe hurt travel.”
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