March 27, 2019 / 6:19 PM / 25 days ago

Alitalia calls on Italian railways to speed up rescue plan

MILAN (Reuters) - The three commissioners running Alitalia are putting pressure on Ferrovie dello Stato to present a rescue plan for the troubled airline but are willing to allow it more time.

FILE PHOTO: An Alitalia airplane is seen before take off from the Leonardo da Vinci-Fiumicino Airport in Rome, Italy, June 21, 2018. REUTERS/Stefano Rellandini/File Photo

Alitalia was put under special administration in 2017 after workers rejected its most recent rescue plan.

State-owned Ferrovie, which said last year it was interested in Alitalia, is racing to meet an end of March deadline set by Rome to present a business plan for the troubled carrier.

Ferrovie, which has been spearheading the rescue efforts, is looking to create a transport consortium to offer consumers a one-stop shop for travel inside and outside Italy.

The railway group said in a statement on Wednesday it needed more time to go into further details on the rescue plan.

The special commissioners in a parliamentary hearing on Wednesday said the main risk facing Alitalia was the possibility of the airline falling into liquidation if there was no rescue package in the coming weeks.

“A deadline extension for Ferrovie could only be very short... we are talking about weeks, not months,” Alitalia Special Commissioner Daniele Discepolo said during the hearing.

Discepolo, Enrico Laghi and Stefano Paleari have been working flat out to cut costs and revive travellers’ confidence in the carrier in the hope a consortium of industrial partners would take it over and pay back a 900 million euro bridge loan granted by the state.

The loan needs to be repaid by the end of June.

“Either Ferrovie files a request for an extension that is backed by documents or it is better they walk away because we are using public money — I don’t want to say we are burning it — to make the airline fly,” Discepolo said.

He said the law would force them to put the carrier into liquidation if time ran out.

Ferrovie [IPO-FERRO.MI], which is in negotiations with U.S. carrier Delta Air Lines, also said it was talking with a “small group of potential partners” without giving further details.

The railways group is prepared to take up to 30 percent of Alitalia, sources have said. To date it has secured a commitment from Delta to take an additional stake of up to 15 percent, leaving open the question of who would buy the rest.

The commissioners said that under their management Alitalia had made substantial progress, adding the airline was now attractive to potential buyers.

Alitalia’s revenues rose 3.5 percent last year to 3.07 billion euros ($3.5 billion), documents prepared for the parliamentary hearing showed.

It recorded a loss at the core earnings (EBITDA) level of 120 million euros, down from 283 million euros in 2017.

Reporting by Francesca Landini. Editing by Jane Merriman

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