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Thursday, 14 October, 2004, 19:21 GMT 20:21 UK

EU studies Alitalia restructuring

Alitalia plane The European Commission has said is to start an immediate review of Alitalia's restructuring plan.

Thursday's announcement comes after Spanish flag carrier Iberia voiced its opposition to what rivals see as state aid to the Italian airline.

The Commission said it would determine whether the plan broke state aid rules.

On Monday Alitalia reached agreement with the Italian government on a 400m euro ($495m; £275m) loan to aid the struggling airline's restructuring.

Job losses

"The plan is going to be presented in Brussels [Thursday evening]," said European Union Transport Commissioner Loyola de Palacio.

Any investigation could take up to 18 months.

"British Airways has already brought a complaint and we are joining it," said Iberia's chief executive Angel Mullor.

Alitalia's restructuring plans include cutting its 20,700 workforce by 3,700, as it seeks to return to profit within three years.

The airline lost 330m euros in 2003 as it struggled to get to grips with high costs, spiralling oil prices, competition from budget carriers and reduced demand.




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Related to this story:
Alitalia secures 400m euro loan (11 Oct 04  |  Business )
Staff layoff deal for Alitalia (06 Oct 04  |  Business )
Unions agree Alitalia pilot deal (15 Sep 04  |  Business )
Alitalia nears final union deal (24 Sep 04  |  Business )
Alitalia deal crosses last hurdle (18 Sep 04  |  Business )
Unions battle over Alitalia deal (07 Sep 04  |  Business )

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