Business World

Monday 14 October 2019

Alitalia investors list obstacles in way of rescue plan

The rescue of Alitalia has encountered hurdles
The rescue of Alitalia has encountered hurdles

Stefano Bernabei

Investors working on the rescue of Italian flag carrier Alitalia will send the industry ministry a list of obstacles standing in the way of the airline's turnaround, one source close to the matter said, putting pressure on Rome to help with finalising a deal.

Infrastructure group Atlantia, railway company Ferrovie dello Stato, US carrier Delta Air Lines and the finance ministry have been discussing Alitalia's rescue since July. But with less than two weeks left to present a plan for the loss-making firm, rescuers have laid out what they believe are the stumbling blocks.

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The first hurdle to overcome is getting a commitment from all sides to inject more funds if needed to recapitalise the carrier after an initial investment, the source said.

Delta has so far resisted pressure from the Italian government to invest more than $100m (€91m), limiting its commitment to a 10pc stake.

A second issue is the participation of Alitalia in a new co-operation agreement Delta has signed with Air France KLM and Britain's Virgin Atlantic over North American routes, the source said. Another sticking point is how best to stem the airline's losses, given it is not clear how many layoffs will be necessary to restructure the carrier, and what the government may do to reduce the social impact of the restructuring.

Pilot and flight assistant unions ANPAC, ANPAV and ANP on Friday confirmed a 24-hour strike on October 9, and said they had written to industry minister Stefano Patuanelli to express their concern. "The latest developments ... seem to weaken the chances of successfully concluding negotiations ... over the relaunch of Alitalia," they said.

Alitalia also risks burning through its cash before a rescue plan is agreed and approved by European authorities.

All those involved in the rescue were not immediately available for comment.

Reuters

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