Alitalia’s fate in question after workers reject deal to avoid collapse

Alitalia, Italy’s flag carrier, has been plunged into chaos after its workers rebelled against a deal struck ten days ago by management and trade unions to save the airline from collapse by cutting wages and laying off employees.

The vote against the agreement jeopardises a key round of financing that had been planned to keep Alitalia solvent, meaning the airline now faces possible receivership, liquidation and a grounding of its fleet.

Paolo Gentiloni, Italy’s prime minister, called key ministers to Palazzo Chigi, the seat of the government in Rome, on Monday night for emergency talks about the fate of the carrier, which has been a staple of European civil aviation since its first flight in 1947.

In recent days, senior Italian officials have repeatedly ruled out bailing out Alitalia with taxpayer money, leaving it with no options for survival unless there is a change of heart.

Alitalia was thought to have found its saviour after Etihad of the United Arab Emirates made a major investment in it nearly three years ago, taking a 49 per cent stake. But its attempts to return quickly to profitability were hit by growing competition from low-cost carriers, as well as the impact of terrorism on European travel.

Alitalia tried to get back on course earlier this year with a plan to cut €1bn in costs over the next three years with up to 2000 layoffs and salary cuts of up to 30 per cent. In a deal reached with the trade unions on April 14, which was supposed to pave the way for a new round of financing for the airline, the redundancies were reduced and the wage cuts were slashed to 8 per cent. But the staff of 11,400 employees still rejected the solution in Monday’s vote, putting an end to hopes that this could be a way out.

“It was an agonising but determined vote against a company that has done little until now to lift its fortunes,” the trade unions said in a statement as the outcome became clear.

“We will wait for the assessment and the decisions of the shareholders and the government, in the knowledge that every solution needs to be searched to avoid decisions that would be unchangeable and traumatic,” they added.

The Alitalia board said it would meet on Tuesday to discuss the “negative outcome” of the vote.