Alitalia lacks time and money – reports


Alitalia (AZ, Rome Fiumicino) paid its 10,500 employees only half of their March salary because it lacks cash as talks between Rome and Brussels on the creation of a new public company, ITA – Italia Trasporto Aereo (AZ, Rome Fiumicino), are at an impasse. There are only three weeks left to strike a deal if the newco is to take off in time for the vital summer season, according to the Corriere della Sera newspaper.

The bankrupt Italian airline has been under administration since 2017 and remains operational thanks to more than 5 billion euros (5.9 billion USD) in public funding, some of which are still under investigation by the European Commission.

The European Union opposed segments of the new airline’s launch plan, insisting on a separation between Alitalia’s assets and those of ITA. As previously reported, Brussels demanded, according to local media, that the newco pay market rates if it wants to keep, for example, the Alitalia brand and its lucrative niches at Milan linate.

Giancarlo Giorgetti, Italian Minister for Economic Development, admitted last week that talks with the European Commission have stalled. A “new strategy” is needed “in light of the deadlock in negotiations with the EU,” he reportedly said after a meeting with Alitalia’s special commissioners.

Prime Minister Mario Draghi had tasked Giorgetti and finance ministers Daniele Franco and transport ministers Enrico Giovannini to manage negotiations with the EU antitrust czar Margrethe Vestager. But so far, three meetings have yielded no results.

“Alitalia’s situation has been assessed in the light of the blocked talks with the European Commission. We believe a new action plan is needed […] to keep the business running, ”Giorgetti said after meeting with the directors without giving details.

In an effort to keep the ITA plan alive and keep paying Alitalia’s heavy labor force, the government may decide to continue selling its planes and other assets to ITA. At the same time, he is trying to break the deadlock with Brussels, sources told local media.

The government’s “new action plan” could also involve arranging the leasing of Alitalia’s aviation business to ITA, an idea the previous government had put forward, sources said. Another option is yet another injection of public funds into the current Alitalia – and the suspension of the ITA for the time being.

Alitalia directors reportedly told unions by video conference on March 31 that the company’s continuity was in danger and that the company could be forced to ground its planes.

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