Alitalia, the Italian government-run airline and a partner with Delta and Air France in the SkyTeam alliance, told its unions on Monday that it planned to lay off about 5,000 of its 21,000 employees in a move to avoid filing for bankruptcy protection.
In addition to the dismissals, chief executive Giancarlo Cimoli said Alitalia would further pare its payroll by not renewing the contracts of another 1,000 seasonal workers. The job cuts are part of a general restructuring presented to union leaders on Monday that includes a plan to split Alitalia's flight operations and ground services into separate units.
PHOTO: AFP
While some union leaders said they would accept the Alitalia plan as the only chance to keep the airline from failing, others promised strikes. Many unions were to meet yesterday in Rome to formulate a response to Cimoli's plan.
An agreement between management and the unions is crucial to the company's survival because the Italian government has said it would not guarantee a 400 million euro (US$480 million) loan that Alitalia needs unless the unions accepted the restructuring plan.
Cimoli said last week that without the loan, which would provide money to run operations for six months, Alitalia has money to pay salaries and cover other costs only through the end of the month.
The airline did not say when the job cuts would be made, but it did say that they would save the airline 315 million euros in the next two years, suggesting they would come in that time.
Of the jobs lost, 1,570 will be in flight operations and will include 1,050 flight attendants, 450 pilots and 70 people connected to ticketing and other customer services. The rest of the cuts will be in other areas and will include 1,440 maintenance workers.
The plan presented by Cimoli forecasts that Alitalia's revenues will increase 13 percent from last year to 2006.
If Cimoli successfully closes the negotiations with the unions, it would come after more than a year of meetings between management and labor representatives. His two predecessors clashed with unions over planned job cuts -- and eventually lost their own jobs because they could not reach an accord.
A previous restructuring plan also called for 5,000 job cuts, and even though that was scaled back to 3,300, the unions still rejected the idea and held a series of strikes in April and May that forced Alitalia to cancel 1,250 flights.
The battle between management and the unions took on a political dimension in recent months as the various political parties that make up the coalition of Italian Prime Minister Silvio Berlusconi disagreed over what to do with Alitalia. The dispute almost led to a government crisis earlier in the year.
The government owns 62 percent of Alitalia and has taken an active role in trying to resolve the airline's financial crisis. Berlusconi said over the weekend that he was watching Cimoli's work closely.
If an accord is not reached by the beginning of next month, Alitalia could be forced into bankruptcy protection. Under Italian law, the airline would then be put into extraordinary administra-tion, which would make it easier to lay off workers and could lead to liquidation.
Cimoli, who said his restructuring plan would return Alitalia to profitability in two years, may give further details on the capital increase at a shareholders' meeting scheduled for today. The company has had an operating loss for the last five years and last year had a net loss of 511 million euros.
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