CK
ScanFlyer Mile High Club
Alitalia unions agree on plan to split company into two units
Dateline: Monday September 27, 2004
Alitalia reached agreement Friday with eight of its nine unions on its plan to split the carrier into two companies, AZ Fly for air operations and AZ Service for ground support including maintenance and airport services.
The agreement seemingly clears the way for Alitalia to draw on a state-guaranteed bridge loan of eur400 million ($492 million) that Chief Executive Giancarlo Cimoli has said is necessary to keep the airline from shutting down at the end of this month.
The accord includes guarantees sought by the unions that the Italian state, which currently owns 62% of the ailing carrier, will maintain a strong presence in the divided units following a capital increase. It also includes state-backed social "shock absorbers" to accompany the elimination of 3,700 jobs to which the unions agreed over the past weeks. Union representatives still plan to submit the reorganization proposal to their members in a referendum.
The agreement foresees that the government will retain at least 30% of AZ Fly and that the unit initially will keep 100% of AZ Service. At a later date, this stake will fall to 51% while a publicly owned company--most probably state holding company Fintecna--takes the other 49%. This shareholder setup would last until at least 2008, Alitalia said in a statement.
Cimoli told the Italian parliament Thursday that Alitalia will have just eur20 million ($25 million) in cash left by the end of Sept. but stressed it "can make it" because the "company will do its all." He also said he is in talks to form an alliance in the short term with a domestic competitor, adding that there are two or three possible candidates--Air One, Volare and Meridiana--with the latter viewed as the most likely, based on remarks he made to La Stampa. He also said he intends to maintain Alitalia's alliance with Air France, reversing a comment made earlier this month and rebuffing a recent statement by Transport Minister Pietro Lunardi that an alliance with Lufthansa would be a better deal.
Dateline: Monday September 27, 2004
Alitalia reached agreement Friday with eight of its nine unions on its plan to split the carrier into two companies, AZ Fly for air operations and AZ Service for ground support including maintenance and airport services.
The agreement seemingly clears the way for Alitalia to draw on a state-guaranteed bridge loan of eur400 million ($492 million) that Chief Executive Giancarlo Cimoli has said is necessary to keep the airline from shutting down at the end of this month.
The accord includes guarantees sought by the unions that the Italian state, which currently owns 62% of the ailing carrier, will maintain a strong presence in the divided units following a capital increase. It also includes state-backed social "shock absorbers" to accompany the elimination of 3,700 jobs to which the unions agreed over the past weeks. Union representatives still plan to submit the reorganization proposal to their members in a referendum.
The agreement foresees that the government will retain at least 30% of AZ Fly and that the unit initially will keep 100% of AZ Service. At a later date, this stake will fall to 51% while a publicly owned company--most probably state holding company Fintecna--takes the other 49%. This shareholder setup would last until at least 2008, Alitalia said in a statement.
Cimoli told the Italian parliament Thursday that Alitalia will have just eur20 million ($25 million) in cash left by the end of Sept. but stressed it "can make it" because the "company will do its all." He also said he is in talks to form an alliance in the short term with a domestic competitor, adding that there are two or three possible candidates--Air One, Volare and Meridiana--with the latter viewed as the most likely, based on remarks he made to La Stampa. He also said he intends to maintain Alitalia's alliance with Air France, reversing a comment made earlier this month and rebuffing a recent statement by Transport Minister Pietro Lunardi that an alliance with Lufthansa would be a better deal.
