Alitalia Filed For Bankruptcy Again

a330-200 alitalia

Alitalia Filed For Bankruptcy, pic: Airbus A330-200

Alitalia Filed For Bankruptcy for the second time in the last nine years. The Italian national flag carrier has filed for bankruptcy after failing to obtain payment concessions from its workforce and a refinancing plan for Etihad Airways, based in Abu Dhabi, among others. In a statement issued on Tuesday, the Italian airline said its board of directors voted unanimously to enter "extraordinary administration" after the company's shareholder meeting.

"The negative vote has determined the inability to implement the relaunch and restructuring of the company," the statement said. This is the second time that Alitalia has been declared bankrupt since 2008.

"The Italian shareholders and Etihad, based on the strong growth potential of the company and an industrial plan that included a structural cost reduction of which two-thirds were not related to labor costs, pledged to recapitalize and finance the Plan with € 2 million, "Alitalia said. Most of that sum would have come from Etihad, which owns 49 percent of Alitalia.

However, the Abu Dhabi-based airline did not commit funding unless Alitalia managed to persuade its workforce to accept a plan to lay off 2,000 employees and institute salary cuts of up to 30 percent in three years. After a series of intense negotiations, an agreement reached with the unions on 14 April would have reduced wages by only 8 percent and reduced the number of job cuts to about 1,700. But workers rejected the plan in a vote on April 24.

In a separate statement, Etihad confirmed that it would not participate in a refinancing plan without the employee's concessions. "We deeply regret the result of the vote of the Alitalia staff, which means that all parties will lose: Alitalia employees, their customers and their shareholders, and ultimately also Italy, so Alitalia is an ambassador worldwide "Said James Hogan CEO of Etihad Aviation Group.
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