Alitalia and its unions have reached agreement on cutting costs without reducing its workforce by 2,500, as originally mooted. The deal means that the carrier can proceed with are capitalisation.
Alitalia hopes to reduce its labour costs by Є142.6 million ($104 million) over the next two years by freezing wage increases and cutting benefits.
The cost reductions are combined with 800 early retirements. Of these, 400 have already left and the remaining 400 will retire before the end of the year.
Alitalia has set aside Є100 million this year to pay for the plan. It will also not renew up to 500 temporary contracts.
The original plan would have slashed 3,400 jobs, including 2,500 compulsory redundancies, from its 24,000 workforce.
The unions are expected to sign the agreement soon, although they are requesting more compensation. Employees received a 20% stake in Alitalia in 1996 in exchange for cost-cutting measures.
Having reached agreement with its unions, Alitalia is expected to proceed with the recapitalisation, issuing convertible bonds to raise Є1.2-Є1.4 billion.
Source: Flight International
