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Thursday, 22 November, 2001, 23:06 GMT
Alitalia forges survival plan
Feature from Alitalia website
Alitalia, the Italian flag carrier, has forged an industrial plan in order to secure its survival.

The deal - which includes 3,500 job losses - is aimed at seeing the airline return to profitability by 2003.

The airline, which is 53% owned by the government, forecast operating losses of 600m euros (373.5m; $526.6m) this year.

And it estimated that it would need up to 1.8bn euros by the end of June 2002 if it is to survive.

The airline industry has been suffering massive losses since the 11 September terrorist attacks.

The airlines face substantial bills for improved safety measures, at the same time as suffering from a slump in ticket sales.

Cash-raising

The company did not explain how it proposes to raise the necessary cash, but most speculation centered on a bond issue.

An industry source had earlier said that Alitalia would sell 35% of its capital - part of the controlling stake owned by the Italian Treasury - in the form of convertible bonds.

Other confirmed cash-raising measures include selling its headquarters near Rome's Fiumicino hub, the charter company Eurofly, tour operator Italtour and booking agency Sigma.

Unions and workers have been calling on the government to help out the carrier, even though this would be in breach of the EU ruling on state aid.

Italian air transport unions have called a 24-hour strike on 3 December in order to pressurise the government into helping the struggling industry.

Axing international routes

In the immediate aftermath of the September tragedy, Alitalia cut 2,500 jobs, reduced its schedules and sold some planes.

It has now upped these job cuts by 1,000.

And at the beginning of October, the firm announced it would axe unprofitable routes and withdraw from all non-core business in order to focus its schedules on hubs in Rome and Milan.

Alitalia shares were suspended for the main session on the Milan stock exchange on Thursday, as the markets waited for details of the plan.

See also:

21 Nov 01 | Business
Airlines to embrace consolidation
04 Oct 01 | Business
Alitalia downsizes
25 Sep 01 | Business
Alitalia cuts 2,500 jobs
17 Jan 01 | Business
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