Alitalia plans to cut costs by €1bn over next three years

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Alitalia has vowed to cut costs by €1bn over the next three years in a bid to return to profitability by 2019, as Italy’s flagship airline embarks on yet another high-stakes restructuring plan.


After a long meeting on Wednesday, the board of the Italian carrier also announced that Luigi Gubitosi, the former chief executive of Rai, the state-owned television network, would become a director, replacing Roberto Colaninno. Once shareholders approved the funding for Alitalia’s new plan, he would become executive chairman, paving the way for Luca di Montezemolo, the current chairman, to step aside.

After reaching a landmark deal with Etihad, the UAE-based carrier, in 2014, Alitalia had aimed to break even by this year. But that effort failed dramatically, forcing Alitalia to go back to the drawing board.

“The aviation industry is ferociously competitive and never stands still,” said Cramer Ball, Alitalia’s chief executive. “ Only through radical change will Alitalia’s fortunes be turned around,” he added.

The airline said it would submit the plan to the Italian government on Thursday, and the restructuring would be subject to an agreement with trade unions on a new collective works agreement. The plan is expected to result in layoffs, though the precise figure is unclear.

Alitalia has been hurt by its high cost base as well as growing competition from low-cost carriers which have made big in roads in the Italian market in recent years.

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