In order to protect its stateside operating interests, Alitalia has filed for Chapter 15 bankruptcy protection through the U.S courts. U.S Bankruptcy judge Sean Lane has granted the Italian flag carrying airline a restraining order that will last for 10 days and unless any creditors object, the order will automatically be extended until June 26.
Chapter 15 bankruptcy protection allows foreign companies access to U.S. bankruptcy courts and for Alitalia this relates to the carrier’s leased gates at a number of U.S airports and its U.S operation which has 36 employees. The company’s attorneys have been arguing that its U.S. business is “critical to its overall global operations” and should thus be protected. Currently the airline operates nine daily flights between the U.S. and Italy.
The current Chapter 15 bankruptcy application has come about through the airline’s receipt of notification from the operators of New York JFK airport that its lease and contract would be terminated on June 13 if outstanding debts were not settled. Additionally, its U.S. telecoms provider has advised that telephone and Internet services will be terminated on June 20.
In the court-filed petition, it is stated that approximately 30% of Alitalia’s revenue is generated from U.S flights, and 15% of its global revenue through flights to JFK airport.
It was back at the end of April that over 60% of Alitalia crews voted to reject a rescue package despite its acceptance by the unions. The carrier is 49% owned by the Gulf airline, Etihad Airways.
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