Alitalia board approves bankrupcy protection

29th Aug 2008

Hopes of troubled Alitalia look marginally brighter after its board today formalised a request to seek administration protection.

Its board of directors is meeting in Rome to draw up a rescue plan that would see the Italian carrier divided in two. Its loss-making units are to be left under bankruptcy protection while its healthy parts will be acquired by a holding company composed of 16 Italian investors in an effort to create a leaner airline with control of the Italian market.Air France-KLM and Lufthansa have expressed an interest in taking a stake in the restructured carrier. Corrado Passera, the CEO of the carrier’s sale adviser Intesa Sanpaolo, said the bank had received a letter from Air France-KLM acknowledging the rescue plan.

Smaller Italian carrier Air One will be folded into the restructured airline, which is expected to focus on short routes and will operate with a smaller fleet and about 40 percent fewer employees.

Speaking to Reuters at a conference in northern Rimini, he warned the next four weeks would be crucial to determine whether the rescue plan could be accomplished, and said a deal with Alitalia’s strike-prone unions would be key.

The struggling airline reported a 35.6% rise in passengers carried for the period August 1-24, against a 29.1% increase in the number of seats offered, compared to the same period in 2007. The load factor (seat occupancy index) also went up by 3.5 percentage points to 74.5%.


International traffic rose by 42.8% with a load factor of 79.3% (for Malpensa, during the same period in 2007, the load factor was 75.7%) and intercontinental traffic increased by 121.1% with a load factor of 84.6% (for Malpensa, during the same period in 2007, it was 81.2%).



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