Flying on Alitalia in the near future? Are you sure of that? The beleaguered Italian flag carrier’s employees rejected a deal on Monday that was set to keep the company flying. It has been hemorrhaging cash seemingly forever now, despite various investments and efforts to turn the operation around, most recently from Etihad which holds a 49% stake in the airline. It desperately needed to cut costs and revamp operations to focus on profitable operations and trim fat.
The company proposed slashing 2,000 jobs and cutting salaries by 30%. Those numbers were negotiated down to only an 8% pay cut and fewer total jobs lost. If approved the deal would have enabled a refinancing of some debt and an infusion of new cash. Without the deal the debt remains and there is no new cash. As Lucia Annunziata of HuffPo Italy describes it, the “workers have said No, choosing suicide instead of sacrifices.” This was not a close race, either. Some 87% of the 12,000 eligible workers participated in the vote and nearly every group voted no, some by massive margins. The cabin crew group in Rome voted 3166-304 against, for example. Ratios greater than 80% no were also reported from the crew bases in Milan. Ground workers were closer overall but still voted no.
*digs out old 'Alitalia faces doom' pieces from 1998, 2003, 2004, 2006, 2008, 2009, etc*
— Alastair Jamieson (@alastairjam) April 24, 2017
Of course, this story has been written many times before. On the brink of collapse and with no options available Alitalia has managed to pull a proverbial rabbit out of a hat again and again. And maybe that will happen again this time. Maybe a last minute negotiation will save the carrier.
Or maybe Etihad’s 2014 investment will end up worthless, as it failed to consider the union impact on its plans to turn around the carrier. Yes, there were challenges with competition, the European economy, and demand in general. But those things are easier to plan for and work around than unions that don’t want to cooperate with the restructuring plan. Ignoring the unions when it comes to planning such transactions is a mistake that seems to happen far more often than it should around the world (Hi there, UA/CO Flight Attendants!) and nearly every time when it comes to Alitalia in the past decade or so.
Expect plenty more drama on this front in the coming days but, for now, I would definitely recommend against booking on Alitalia for anything past this summer. Good luck.
Header image: An Alitalia 777 featuring the new livery, courtesy of the company
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