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Tuesday, 25 September, 2001, 16:33 GMT 17:33 UK
Alitalia cuts 2,500 jobs
Alitalia Boeing 747
Alitalia is selling some of its jumbos and cutting New York schedules
Alitalia, the Italian flag carrier, has said it is to cut 2,500 jobs, drop routes, sell some of its planes and stop orders for new ones.

The move, aimed at reducing already large losses, comes in the wake of the terrorist attacks on the US which plunged the global aviation industry into crisis.

In the past two weeks, US and European airlines have announced a total of more than 100,000 job losses.

Many carriers are also cutting capacity substantially.

Unprecedented

"The grave and immediate repercussions of the attacks on the US at a global level have created a crisis in the civil aviation industry unprecedented since the Second World War," Alitalia said in a statement.

The Alitalia cuts will affect one eighth of the company's 20,000 workers, with 900 flight staff and 1,600 ground staff jobs to go.

Twelve aircraft including four Boeing 747 jumbo jets are to be mothballed or sold while scheduled services to Hong Kong, Beijing and San Francisco are being suspended.

Capacity on routes to New York is being reduced.

Alitalia said the cuts were aimed at reducing losses in the six month period from October 2001 to March 2002 to about 400bn lire ($190m; 130m) from a previous estimate of 700bn lire.

The struggling airline had already notched up losses of 503bn lire in January-June this year, in a worsening performance since last year's 495bn lire full-year loss.

Shares suspended

Alitalia shares were suspended from trading on the Milan stock exchange on Tuesday, after exceeding the permitted 10% daily gain.

The stock exchange said the shares were suspended at 1113 GMT, when they stood at 0.734 euros, up 11.03%.

Despite Tuesday's rise, the shares remain about two-thirds down on their level 12 months ago.

Last week, Alitalia asked the Italian government for emergency support in light of the global aviation industry crisis and US support for its national carriers.

Shortly after Alitalia announced its job cuts, the government unveiled a 300bn-400bn lire aid package for Italian airlines, which would be used for reducing airport taxes and sales tax on tickets and paying for greater security measures.

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