Alitalia will make a formal request to enter into bankruptcy after employees last week rejected a rescue plan.
The Italian flag carrier’s board of directors, which convened after a shareholder meeting, decided to proceed with administration in light of the “serious economic and financial situation of the company”, the shareholders’ unavailability to refinance and the impossibility of finding an alternative solution in the given time.
The airline said it noted with deep regret employees’ decision last week to reject a rescue plan.
“Italian shareholders and Etihad, based on the strong potential growth of the company, and on an industrial plan which included a structural cost reduction of which two thirds were not related to labour costs, were committed to recapitalise and finance the plan with €2bn,” Alitalia said.
According to Reuters the workers rejected the rescue plan because it would involve wage reductions and 1,700 job cuts, instead hoping that the government will step in.
Rome has provided a €400m bridge loan to help the airline operate during the bankruptcy proceedings. The government has ruled out re-nationalising the airline or providing further funding.
In the meantime all flights will operate as planned.