Fasten your seatbelts

31 October 2003 By Fiona Maharg-Bravo

The plan to turn around the lossmaking Italian carrier is largely sensible. But the trick is to actually deliver. Fear of being left out of European consolidation might just be the stick it needs to get its act together.

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Alitalia has announced it will cut 2,700 jobs as part of a threeyear restructuring plan announced in early September. As part of the plan, the Italian carrier also said it plans to invest approximately E1.2bn over the next three years to complete the renewal of its fleet. The company expects to post an operating loss of E410m in 2003, but would reach full economic balance in 2005.

Francesco Mengozzi, Alitalia's chief executive, said the measures would enable it to take its rightful place in the vital process of integration amongst carriers which is taking place today.

Italian unions have rejected the plan and have threatened to strike later this month.

Alitalia hopes to join the announced merger of Air France and KLM, but the Dutch carrier says Alitalia must first privatise and restructure before it can be allowed to join.

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