alitalia turnaround plan at risk after unions reject deal
Last Updated : GMT 09:07:40
Egypt Today, egypt today
Egypt Today, egypt today
Last Updated : GMT 09:07:40
Egypt Today, egypt today

Alitalia turnaround plan at risk after unions reject deal

Egypt Today, egypt today

Egypt Today, egypt today Alitalia turnaround plan at risk after unions reject deal

The tentative agreement hammered out between Alitalia union leaders
Milan - Arab Today

The chief executive of Etihad Airways Group and vice-chairman of Alitalia, James Hogan, has warned that "all parties will lose" following a rejection of its latest turnaround plan by Italian union members.
Alitalia’s management had negotiated a settlement with the heads of Italy’s biggest labour unions which would have seen a refinancing package worth about €2 billion being made available to fund the struggling airline’s new, five-year business plan, but this involved implementing about €1bn worth of savings, including the laying off of around 1,600 staff. The plan also involves an expansion strategy aimed at growing revenues by about 30 per cent.
However, the tentative agreement hammered out between union leaders, stakeholders and government ministers was rejected in a ballot by union members on Monday evening.
Mr Hogan said that Etihad, which has owned 49 per cent of Alitalia since 2014, and other shareholders had "provided vast amounts of financial and commercial support during the past three years".
He added that Etihad had "reaffirmed its strong commitment and principal willingness to support the airline" through the new proposed new funding, but that this had been dependent on the support of the unions.
"The rejection of this agreement in the staff ballot is deeply disappointing," he said.
"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 next step for the airline, which employs 12,500 staff, could be the appointment of a special administrator to the company by the Italian government.
Etihad paid €560 million (Dh2.24 billion) for its stake in Alitalia in 2014, pledging to turn around an airline that had last made a profit in 1998.
Its investment was part of a wider €1.76bn recapitalisation of the airline agreed with its lenders that wiped out historic losses and provided a clean slate for the company, which is still majority (51 per cent) owned by Compagnia Aeria Italiana.
Etihad initially set a target for getting Alitalia back to profitability by this year, and its most recent accounts for 2015 showed that it managed to cut losses by €381m, or 65 per cent, to €199.1m on revenue of €3.3bn.
However, the protracted negotiations with unions over reform meant that its profitability target was recently pushed back to 2019.
In May last year, the company’s new chief executive Cramer Ball highlighted the investment that was being made right across the business, including €400m on aircraft upgrades, lounge upgrades, menu overhauls, training for thousands of staff and even new uniforms by designer Ettore Bilotta.
Chris Tarry, an aviation consultant at UK-based CTAIRA, said: "The fundamental problem is that there is always this view [in Italy] that the Italian government is going to come in and bail them out. Whilst that continues to be the case, it’s going to be very difficult to get the necessary alignment of objectives.
"Turnaround programmes are pretty easy – take out waste, generate more revenue – shrink, survive and grow. But you have to be able to implement. The challenge facing many managements of Alitalia - and many other airlines, too – have been that sometimes they are not capable of that."
Jonathan Wober, an industry analyst with CAPA - Centre for Aviation, said that a "meaningful restructuring is not possible without union co-operation".
"Whether Alitalia fails or not comes down to cashflow and this will depend on the shareholders’ willingness to provide yet more capital to fund losses. "That only seems likely if there is a clear and agreed path to restoring profit."

Source: The National

egypttoday
egypttoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

alitalia turnaround plan at risk after unions reject deal alitalia turnaround plan at risk after unions reject deal



GMT 06:29 2011 Monday ,14 November

Matthew cruises to win at Ochoa Invitational

GMT 03:34 2017 Wednesday ,22 March

Tillerson to skip NATO meeting next month

GMT 13:44 2013 Friday ,15 March

Israel suppress Palestinian demonstrations

GMT 16:15 2017 Monday ,01 May

Moroccan Workers’ Syndicate

GMT 11:56 2016 Wednesday ,12 October

Toyota, Suzuki eye partnership as industry consolidates

GMT 15:42 2011 Thursday ,23 June

Express checks in with foursquare

GMT 10:49 2017 Sunday ,13 August

Car rams into crowd at violent Virginia rally

GMT 17:45 2013 Sunday ,20 October

5 Indian spices that are good for your health

GMT 08:41 2012 Saturday ,15 September

Italian magazine: will print Kate topless snaps

GMT 08:02 2012 Tuesday ,05 June

Zoe Saldana in Prabal Gurung

GMT 06:11 2012 Saturday ,15 September

Tunisia’s Media Conflict: Journalists fight for freedom

GMT 14:35 2015 Friday ,24 July

Awqaf Minister hails New Suez Canal project

GMT 16:34 2017 Thursday ,28 December

Hitler's Nazi-parade Mercedes set

GMT 11:22 2011 Monday ,10 October

Paul McCartney to play in Moscow in December

GMT 05:17 2015 Friday ,25 September

Pope expresses solidarity with Muslims after stampede

GMT 05:44 2012 Saturday ,21 April

ATV engine 95 HP

GMT 03:01 2011 Monday ,19 September

Laughter, tears at US television\'s Emmy awards

GMT 12:04 2012 Wednesday ,07 March

6 Music animation draws on 10 years of eclectic radio

GMT 01:00 2015 Sunday ,05 April

Barzani congratulates Abadi on Tikrit victory

GMT 13:24 2015 Thursday ,15 October

Tesla installs 'autopilot' update

GMT 06:17 2012 Monday ,02 January

Countries across the world celebrate the New Year

GMT 04:07 2016 Tuesday ,07 June

For new era of self-driving cars

GMT 08:21 2017 Saturday ,23 December

Saudi-Sudanese Deal to Ease Transfers

GMT 11:08 2017 Thursday ,21 December

Asian markets mostly down as tax cut euphoria wanes
 
 Egypt Today Facebook,egypt today facebook  Egypt Today Twitter,egypt today twitter Egypt Today Rss,egypt today rss  Egypt Today Youtube,egypt today youtube  Egypt Today Youtube,egypt today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

egypttoday egypttoday egypttoday egypttoday
egypttoday egypttoday egypttoday
egypttoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
egypttoday, Egypttoday, Egypttoday