Alitalia may cut 2,000 jobs and 20 routes to slow airline’s decline

Italian carrier likely to remain loss-making for the next two to three years

Alitalia said the next phase of its industrial plan would be presented to its board of directors and its staff soon

Alitalia said the next phase of its industrial plan would be presented to its board of directors and its staff soon

 

Alitalia could cut up to 2,000 jobs as controlling shareholder Etihad Airways pushes for sweeping changes to turn the loss-making airline around, according to sources close to the matter.

The Italian carrier may also ground at least 20 planes to cut certain unprofitable routes on domestic and regional services where it is struggling to compete with low-cost rivals and high-speed trains, the sources said.

It is likely to remain loss-making for the next two to three years – even if it carries out the job cuts of around a sixth of its workforce and the plane groundings, said one of the sources.

Financial hits

But a failure to slow the airline’s decline and ultimately reverse its fortunes would not only see Abu Dhabi state-owned Etihad take further financial hits on its investment, but deal a significant setback to its European expansion ambitions.

It would also represent a defeat for the Italian government, which regards Alitalia as a strategic asset and a matter of national pride, denting its industrial strategy aimed at attracting foreign investment.

Yet Rome is in a tough position, as news of possible job cuts at Italy’s flag carrier come at a sensitive time – days from a December 4th referendum on constitutional reforms that Prime Minister Matteo Renzi has staked his political future on.

Alitalia said the next phase of its industrial plan would be presented to its board of directors and its staff soon and that it would not comment on any speculation until then.

Etihad, which owns 49 per cent of the carrier, declined to comment.

– (Reuters)

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