Alitalia risks collapse after unions reject restructuring plan

[ROME] Workers at Alitalia SpA, Italy's main airline, voted against a restructuring plan seen as the last chance for the long struggling carrier to avoid being placed under administration.

Staff at the airline, which employs 12,500, voted against a rescue plan approved by management and union leaders, according to the results of a ballot released by Uiltrasporti on Monday. Among other measures, the plan included salary reductions and hundreds of job cuts. An earlier version, which met strong resistance from unions, had called for over 2,000 job cuts.

Ahead of the vote, Economic Development Minister Carlo Calenda said that in the event of a "no" vote, the government would likely act as a special administrator for the airline for about six months before liquidation.

The Rome-based carrier, which went bankrupt in 2008 after rescue attempts involving the state and private investors failed, is fighting against the clock to avoid a liquidity crunch. A turnaround strategy by Abu Dhabi-based Etihad Airways, which bought a 49 per cent stake in 2014, has not been sufficient to keep the company afloat.

The approval was a condition for proceeding with a 2 billion-euro (S$3 billion) recapitalisation, including about 900 million euros in new funding, according to Alitalia's latest business plan. UniCredit SpA said last week that the bank has lost almost 500 million euros on the Italian carrier.

BLOOMBERG