Alitalia has filed for administration for the second time in a decade, a move that could see the troubled Italian national carrier restructured, sold or finally wound up.
The loss-making airline asked the Italian government to put it in administration on Tuesday following a vote by employees to reject a rescue plan, which would have seen shareholders invest a further €2bn (£1.7bn) but slash wages.
The government is expected to appoint commissioners to assess whether Alitalia can be maintained in any capacity or liquidated. Flight schedules will continue unchanged in the meantime.
It has ruled out renationalising Alitalia, which was privatised and relaunched in 2008 after filing for bankruptcy protection earlier that year.
The Gulf airline Etihad, which owns 49% of Alitalia, said it would not invest any further “without the support of all stakeholders”. James Hogan, chief executive of Etihad, which took its stake in Alitalia during the last restructuring in 2014, said the airline required “fundamental and far-reaching restructuring to survive and grow in future”.
Hogan said new challenges, including greater low cost carrier competition and the impacts of terrorist events on tourism demand, meant further, deeper change was required.
Alitalia was once one of Europe’s very largest airlines, but it has struggled against rivals including Ryanair and easyJet. Low cost carriers have opened bases in Italy and started operating on domestic routes, and have long surpassed Alitalia in terms of passenger numbers – and profits.
The airline is counting on government support to keep operating, with a short-term loan of up to €400m likely to see it through the bankruptcy process and enable it to keep flying during the lucrative summer months.
A general election due to be held in the next year could be a lifeline, should parties blanch at the prospect of 12,500 workers losing their jobs and Italy losing its flag carrier on their watch.
However, state bailouts would be controversial with the Italian public. Polls have indicated that most Italians do not believe they should continue to pay to prop up the airline, after injecting billions over the decades.
