Wednesday, May 3, 2017

National Freight and Passenger Airline Enters Bankruptcy Proceedings - Again

Workers Reject Deal Following Job Cut Proposals
Shipping News Feature
ITALY – For the second time in a decade, Italy's national airline Alitalia has entered into bankruptcy proceedings, after workers rejected a restructuring plan that included cuts to jobs and salaries. Special Administrators have now be appointed to examine whether the troubled freight and passenger carrier can be salvaged once again, or else risk entering liquidation.

Employees at the country's flag carrier voted to reject a rescue plan that the company’s management had negotiated with trade unions. The deal had involved around 1,600 layoffs, an 8% pay cut, and an increase in working days, in return shareholders would invest €2 billion.

In 2009, Alitalia became a private company after it was rescued from bankruptcy by a group of Italian investors and Air France KLM, which became Alitalia’s largest shareholder with a 25% stake. In 2014, the company yet again on the verge of failing but was bolstered by UAE airline Etihad Airways, which took a 49% stake in the airline. Etihad agreed to a €1.75 billion investment plan to help the struggling Alitalia with the goal for ‘sustainable profitability from 2017’. Several existing shareholders also contributed to a further equity investment total of €300 million.