Business World

Friday 22 August 2014

Alitalia will cut 2,200 staff to seal Etihad deal

Published 10/06/2014 | 02:30

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Gabriele Del Torchio, chief executive officer of Alitalia attends a news conference at the company's offices at Fiumicino airport in Rome, Italy, on Wednesday, July 3, 2013. Photographer: Alessia Pierdomenico/Bloomberg

Alitalia needs a few weeks to seal a deal with Etihad, which could see the Abu Dhabi airline invest €560m in its struggling Italian peer in return for hefty job cuts, Alitalia chief executive Gabriele del Torchio said.

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Mr Del Torchio said Etihad, which already has stakes in Air Berlin and Aer Lingus, was proposing to invest up to €560m in Alitalia, which was kept flying by a government-engineered €500m rescue package last year.

Italy's government is keen to find a cash-rich partner for the flag carrier, but the process has been delayed by disagreement over how to restructure the airline's debt of around €700m, and wrangling over layoffs.

Talks with Alitalia's banks are at an advanced stage, Mr Del Torchio said, hours after Intesa Sanpaolo, which is both a creditor and one of the airline's main shareholders, said it would consider selling its stake but not before 2017.

Asked whether the company hoped to be able to present a draft agreement with banks at a board meeting on Friday, Mr Del Torchio said: "We are working towards this."

Alitalia will have to cut 2,200 jobs to meet Etihad's conditions, Mr Del Torchio said. The layoffs will be "structural", meaning workers leave the company rather than taking advantage of a state-backed temporary furlough scheme.

Alitalia, which employs 14,000 people, was once a national icon whose staff wore uniforms designed by Giorgio Armani, but is now seen as a symbol of the country's economic malaise.

Sources have said Etihad was looking to buy around 49pc of Alitalia.

ends

Irish Independent

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