Alitalia in chaos after workers vote to reject rescue deal

After trade unions had managed to strike a deal with Alitalia’s management ten days ago to reduce the level of stringent measures contained within a rescue package for Italy’s ailing flag-carrying airline, Alitalia, workers have subsequently voted against the new proposals.
“This was a painful vote but a determined one against a company that until now has done little to fix its issues,” several unions said in a joint statement, also indicating that they hoped shareholders and the government would do all they could to avoid decisions that could have traumatic consequences.
The airline had originally planned to cut 2,000 jobs and reduce some salaries by up to 30%, while also being allowed to offer attractive incentives to new pilots – the aim was to reduce costs by €1bn over the next three years.
Subsequent negotiations saw the level of redundancies reduced to 1,338 and then 980, with wage cuts reduced to 8%. However, now this preliminary accord was put to a referendum among the workers, it has been rejected. Part of the rescue deal involved substantial cash injections from the majority stakeholder Etihad, and Italy’s top two banks, Intesa Sanpaolo and UniCredit. In a statement issued by Alitalia directors today (Tuesday) they had noted the outcome of the referendum with “regret”, since it made a planned €2bn recapitalisation of the country’s flag carrier “impossible”.
Led by prime minister Paolo Gentiloni, the Italian government has ruled out intervening to rescue Alitalia with taxpayer funds, having previously injected over €4bn up until the carrier’s privatization in 2009. Officials close to the situation say the most likely option is that Alitalia will be placed into administration so that it can be wound down or reduced considerably in size and sold as a whole or in pieces.
Alitalia has confirmed that its shareholders – including UAE carrier Etihad, Italian banks UniCredit and Intesa, as well as Atlantia, the infrastructure group – will meet to discuss the next steps on Thursday.
Alitalia has also confirmed that there would be no changes to its schedule for the time being. (€1.00 = US$1.09 at time of publication.)