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Bankruptcy looms for Alitalia after workers reject restructuring plan

Italian airline Alitalia inches towards bankruptcy after employees voted down the plan that would keep the carrier afloat, but involved salary cuts and layoffs.

Alitalia workers rejected a management restructuring plan to cut jobs and salaries, betting that the government will be asked to call in an administrator to draft an alternative rescue plan.

So far it is unclear if the Italian government might try to convince EU officials to allow a “bridge loan” for Alitalia to ease the crisis.

James Hogan, President and Chief Executive of the Etihad Aviation Group, and Vice Chairman of Alitalia, said: “We deeply regret the Alitalia staff vote outcome, which means that all parties will lose: Alitalia’s employees, its customers and its shareholders, and ultimately also Italy, for which Alitalia is an ambassador all over the world.

“Alitalia’s shareholders, including Etihad Airways, have provided vast amounts of financial and commercial support during the past three years. 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.”