Alitalia has called a crunch shareholders meeting for 27 April to "initiate procedures provided for by law" after a planned recapitalisation was hit by workers rejecting cuts proposed in a new a labour deal.
Shareholder support for the required recapitalisation of the the struggling Italian carrier was dependent on staff agreement for wage and headcount cuts. But union members yesterday voted against a deal on a restructuring agreement provisionally struck between the airline and union leaders, plunging the airline back into a funding crisis.
"Given the impossibility of recapitalisation, the board decided to initiate the procedures provided for by law and convened a shareholders' meeting on 27 April in order to deliberate on them," the airline says. It does not specify the procedures being considered, though Italian reports suggest one of the moves under consideration is to seek extraordinary administration.
Alitalia says had staff backed the new labour deal it would have unlocked a €2 billion recapitalisation - including €900 million in new finances - that would have enabled it to relaunch the company.
Shareholders include 49% stakeholder Etihad Airways and Italian banks UniCredit and Intesa.
In a separate statement Etihad Aviation Group chief executive - and Alitalia vice chairman - James Hogan says: "Jointly with the Italian shareholders, Etihad had reaffirmed its strong commitment and principal willingness to support the airline with a package worth nearly €2 billion in aggregate to help fund Alitalia’s new five-year business plan. A key condition to this commitment was that an agreed and concerted effort would be made by all interested parties, including the unions.
“The preliminary agreement with unions that was made possible and supported by the union leaders, Alitalia management, the Italian Prime Minister and three government ministers would have helped secure Alitalia’s future. The rejection of this agreement in the staff ballot is deeply disappointing.
“As a minority shareholder in Alitalia we support the board’s decision today to convene a shareholder’s meeting on April 27, to start preparing the procedures provided by the law.”
The Italian carrier in March detailed plans to cut its narrowbody fleet by around a quarter and to seek to reduce costs by €1 billion by 2019, which it says the majority of savings – two-thirds – will come from non-labour-related costs.
The deal brokered by the airline and union leaders would have seen 1,700 staff layoffs - consisting of both permanent and temporary roles - an 8% pay cut for all other workers, and the promise of a contingency plan being drawn up by the state-owned development agency Invitalia as a guarantee.
In a separate statement the airline says despite the rejection of the deal, Alitalia maintains its schedule and its operations will not be altered at this time.
It marks the latest crisis to engulf the loss-making Italian carrier. The airline secured much-needed investment when Etihad acquired a 49% stake in the airline and relaunched it in 2015 with a view to returning Alitalia to profit this year. Those plans have faltered amid the toughening climate in the European airline market.
Alitalia previously entered extraordinary administration in 2008, before restructuring as a new company with private investors and through a merger with Air One at the start of 2009. That paved the way for Air France-KLM to take a 25% stake. The latter, though, allowed its stake to dwindle by not participating in subsequent Alitalia recapitalisations.
A return to profit has throughout remained elusive - Alitalia last recording a net profit in 1999.
Source: Cirium Dashboard
