Alitalia Files for Bankruptcy
Alitalia’s shareholders unanimously voted today to enter bankruptcy procedures. The decision followed the rejection by Italian flag carrier’s employees of a $2.2 billion recapitalization plan that would have resulted in 1,600 workers being laid off and an 8% global pay cut.
This is the second time Alitalia files for bankruptcy in less than 10 years. A similar decision in 2008 was overturned one year later with the help of an investment from its SkyTeam parners Air France/KLM.
The Italian government insisted that it will not either nationalize the airline or inject cash to keep it alive, as the carrier is “a private company whose future is in the hands of shareholders and management”.
Although the travelers will suffer no immediate consequences, a special administrator will take formal charge of the company and develop a rescue plan within 6 months. The plan might involve separating the viable assets from the bad ones that would be liquidated, reducing operations and consequently unlimited job cuts. Reportedly, a group of Italian investors are willing to pay $1.5 billion for the profitable assets.
If the plan fails and the special administrator decides that the company cannot be rescued, the carrier might also be liquidated.
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