Italy’s flag carrier Alitalia has started bankruptcy proceedings for the second time in the last ten years after its employees said ‘no’ to cuts that would have followed the $2.2 billion recapitalization plan purposed to save the struggling carrier.
The airline’s shareholders have voted in favor of special administration, according to a statement issued on May 2.
“Without the support of all stakeholders for that restructuring, we are not prepared to continue to invest,” says James Hogan, the CEO of Etihad, a company that owns a 49% stake in Alitalia.
According to Italian legislature, the country’s government is obliged to provide stop-gap funds to keep the airline aloft. The government-appointed supervisors will be given 180 days to present a new plan, with the possibility to extend the period by up to 90 days.
“Alitalia’s shareholders meeting, convened today, noted with deep regret the outcome of the referendum among the employees,” the company statement says. “The negative vote has determined the inability to implement the relaunch and restructuring of the Company”.
The company informed the public that the flight schedule will remain unchanged.
The government has provided Alitalia with a €400 million ($436 million) bridging loan to help it operate during the bankruptcy proceedings. It is still unclear, whether or not the government will attempt to renationalize the carrier. Bankruptcy would lead to 12,500 Italians losing their jobs.
An opinion poll published on April 29 suggests that 77% of Italy’s citizens think that the government should not rescue airline. During the last decade, the carrier’s struggles have cost Italian taxpayers more than €7 billion ($7.64 billion).