Italy's Gemina unveiled (01-Feb-2013) an updated business plan for Aeroporti di Roma, which includes investing more than EUR3.1 billion over the next 10 years to reverse declining traffic trends. Gemina, which is in merger talks with Atlantia, said it would increase investments by a third to EUR1.2 billion in 2013-2016. The new plan paves the way for Gemina to define details of a merger with Atlantia, including share swap ratios. Gemina said it would invest more than EUR12 billion over the 2013-2044 period, as it aims to turn the Rome airport system into a hub for the Mediterranean region. Gemina said it aimed to attract 100 million passengers by 2044, with an average annual growth rate of 2.7%. Traffic at the Rome airports fell 10% year-on-year in Jan-2013. Gemina also named as board member Carlo Cimbri, chief executive of Unipol , which is merging with Fondiaria-SAI. Gemina said it will present the new plan on 06-Feb-2013. [more - original PR - Italian]
Gemina to invest more than EUR3.1bn over next 10 years in Aeroporti di Roma
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A major focus is to improve Alitalia's competitiveness on short/medium haul, which is increasingly dominated by LCCs, and which is vital to feed its long haul. All the usual features of becoming more competitive versus LCCs are in the plan: lower unit costs, unbundling and a simplified fare structure as a result of headcount reductions and other savings in operating costs.
Labour productivity improvement remains crucial to the plan's success. The plan’s funding, and Alitalia's future growth, will be subject to trade union agreement to a new collective agreement and headcount reductions. However, the immediate union response was to call a strike after management presented the plan to employees. Surely this has to be the last chance.
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Full details of the plan, which has received the support of Italy's government, have not yet been made public. Alitalia's network strategy includes further long haul growth and a reworking of its short haul operation, with an emphasis on feeding long haul via Rome and Milan. Other elements of the plan include cost-cutting, reduced headcount and possible changes to joint venture agreements. Details are to be presented to Alitalia’s workforce in Jan-2017.
Also on 22-Dec-2016, Alitalia's shareholders approved short-term funding and gave management 60 days to begin negotiations with key stakeholders - lessors, suppliers and distribution companies, in addition to trade unions. Alitalia needs their support for deep cost reduction measures, in order to win the long-term financing needed to secure the airline's future.