Alitalia to cut 2,037 jobs, reduce flight crew pay in latest revamp -unions


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UPDATE 1-Alitalia to cut 2,037 jobs, reduce flight crew pay in latest revamp -unions


* Airline management met unions on Friday
    * Unions call strike for April 5 to protest against cuts
    * Alitalia says union backing essential for financing

 (Adds detail, union comment, analyst)
    By Agnieszka FlakMILAN, March 17 (Reuters) - Alitalia's new restructuring
plan envisages cutting 16 percent of its workforce and reducing
flight personnel's salaries by up to a third in a last-ditch
attempt to make the troubled Italian airline profitable, labour
officials said on Friday.
    Italy's flagship carrier, which has made an annual profit
only a few times in its 70-year history, is in a race against
time to win union support for its latest turnaround plan as it
seeks to unlock financing and avoid having to ground planes.
    Unions, however, called a 24-hour strike for April 5 after
discussions with Alitalia management on Friday. The company's
plan includes 2,037 ground staff job cuts out of a total
workforce of 12,500.
    "This is not a plan to get the company back on its feet but
only a cost-cutting exercise," said Emiliano Fiorentino,
national secretary of the Filt-Cisl union.
    "It's basically a survival plan and as such it is not
acceptable."
    Under the plan, flight attendants could have their pay cut
by 32 percent and pilots by 22-28 percent, unions said.
    Labour groups also fear that job cuts could soon extend to
flight personnel.
    Alitalia CEO Cramer Ball said the cuts were "painful but
necessary".
    Despite several overhauls and cash injections over the
years, Alitalia is losing at least half a million euros a day
and could run out of cash in the coming weeks unless
shareholders agree to pump in more money, sources say.
    Alitalia, 49 percent of which is owned by Etihad Airways,
said this week that it expects to return to profit by the end of
2019 through 1 billion euros ($1.1 billion) of cost cuts over
the next three years and a revamp of its business model for
short and medium-haul flights.[nL5N1GS7LT]
    The carrier also pledged to increase revenues by 30 percent.
    The airline, in which banks Intesa Sanpaolo <ISP.MI> and
UniCredit <CRDI.MI> hold stakes, warned that union backing for
the plan is essential to obtaining fresh funding from
shareholders.
    After buying into Alitalia in 2014, Etihad pledged to return
it to profit by 2017 by reducing costs, turning Rome into an
intercontinental hub and expanding lucrative long-haul
operations.
    But the turnaround has faltered in the face of competition
from low-cost airlines such as Ryanair <RYA.L> and high-speed
rail services, while deadly attacks across Europe have dented
demand for travel.
    "The airline sector has peaked in 2016 and it won't be easy
to raise revenues in a market where margins are increasingly
under pressure," said Andrea Giuricin, a transport analyst at
Milan's Bicocca university.

 (Editing by David Goodman)
 ((agnieszka.flak@thomsonreuters.com; +39 02 6612 9450; Reuters
Messaging: agnieszka.flak.thomsonreuters.com@reuters.net))

Keywords: ALITALIA RESTRUCTURING/ (UPDATE 1)



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