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Alitalia, shareholders to meet Italian govt Monday - Etihad
January 9, 2017 / 7:39 AM / a year ago

Alitalia, shareholders to meet Italian govt Monday - Etihad

SYDNEY, Jan 9 (Reuters) - Alitalia and its shareholders are to present its new business plan to the Italian government on Monday, top investor Etihad Airways said.

Italy’s loss-making national carrier approved on Dec. 22 a short-term financing deal and a new strategy, including job cuts, that allowed it to start negotiations with stakeholders.

Alitalia and its investors are meeting with Italian government ministers to explain the plan, Etihad said in an emailed statement to Reuters on Monday.

The Abu Dhabi airline will be represented by its top executive James Hogan, who is also Vice Chairman of Alitalia.

Led by Hogan, state-owned Etihad bought a 49 percent stake in Alitalia in 2014 as part of a 1.76 billion euro ($1.85 billion) rescue plan for the loss-making airline.

Etihad had pledged to return it to profit by 2017 by slashing costs, turning Rome into an intercontinental hub and adding more lucrative long-haul connections.

But two years later, Alitalia is losing at least half a million euros a day and may remain unprofitable for another two to three years, sources have said.

“It is vitally important that the airline’s workforce and major stakeholders, such as corporate partners, suppliers and unions, embrace and accept the radical changes we need in order to gain the next round of significant funding from our shareholders, which will be crucial for our future,” Alitalia Chief Executive Cramer Ball said on Dec. 22.

Etihad, Alitalia’s single largest shareholder, is pushing to turn around the airline. Proposals include cutting up to 2,000 jobs and some unprofitable routes and grounding at least 20 planes, sources have said.

There is scepticism whether Alitalia will be able to push through its latest turnaround plan without significant resistance from influential unions.

Alitalia did not immediately respond to an emailed request for comment.

Etihad said the “full details will be unveiled to the Alitalia workforce later this week.” (Reporting by Jamie Freed in Sydney, Writing by Alexander Cornwell in Dubai, editing by Louise Heavens)

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