Alitalia in administration: attempts business as usual with long haul growth; labour unrest remains

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The restructuring plan adopted by Alitalia in Mar-2017, but eventually rejected by its employees, envisaged capacity reduction on short and medium haul but widebody growth. It hoped to improve its short/medium haul competitiveness against LCCs with lower unit costs, unbundling and a simplified fare structure. On long haul, Alitalia aimed to retain a full service model and to regain market share from Italy, with expansion of capacity to the Americas in particular.

The rejection of the restructuring plan by employees led to Alitalia's entering into special administration on 2-May-2017. On 17-May-2017 the official receivers called for expressions of interest in buying or restructuring Alitalia. The expressions of interest received by the 5-Jun-2017 deadline are now being considered.

At the same time, and in spite of further industrial unrest, Alitalia appears to be attempting to maintain business as usual - to the extent that is possible. In particular, it has pressed on with its long haul expansion plans, announcing new routes to Delhi and the Maldives this winter, and capacity expansion on a number of routes to the Americas. However, all those expressing interest cannot fail to have noticed that, at Alitalia, business as usual also includes industrial relations problems.

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