Alitalia To Receive Another €3 Billion As 6000+ Staff Furloughed

Struggling airline Alitalia looks set to have its future assured as the Italian government is reported to be preparing to inject more than $3bn into the carrier. This comes as the airline reaches an agreement to furlough more than 6,000 workers until the end of October, and has cut its last long-haul route until at least June.

Alitalia Boeing 777
There’s a rescue in the making for struggling Alitalia. Photo: Alitalia

Another bailout for Alitalia

Despite assurances that Alitalia would receive no more government funding back in January, the situation has since changed for the worse. As a result of the coronavirus crisis, the airline is now set to be on the receiving end of a substantial government bailout.

Reuters reports today that Alitalia will be granted a capital injection of at least €3bn ($3.24bn) from the Italian government, as part of the plan to rescue and revive the struggling airline. Industry Minister Stefano Patuanelli confirmed this today at the Italian Senate.

Patuanelli further said that, when the government takes control of the airline, a move slated for June, it will reevaluate its route network to drive towards a more profitable operation. He stated that the carrier “will focus strongly on long-haul routes, also with new transatlantic alliances.”

ALitalia grounded plane
Alitalia won’t operate any long haul flights until at least June. Photo: Getty Images

The airline is currently part of the SkyTeam alliance, but this is up for renewal later this month. It was previously noted that Alitalia might not renew its membership.

Temporary job losses

Although Patuanelli stated at the Senate that the government would do its best to protect current job levels at the airline, it appears that, temporarily at least, the workforce is shrinking dramatically. Hosteltur reports that 6,622 workers will be furloughed until the end of October, as agreement has been reached today with the worker’s unions.

Of these, 3,339 are reported to be flight crew, while 3,283 are ground personnel. All furloughed employees will be enrolled in a salary guarantee scheme, which will see them funded for 70% of their usual salary while they are out of work.

Empty airport in Italy; Alitalia
Workers will be furloughed amid the travel demand slump. Photo: Getty Images

The ‘new Alitalia’ that emerges in June is expected to be a significantly smaller airline, although perhaps not as small as initially envisaged. In March, it was thought the new airline could operate as few as 25 – 30 aircraft. However, since then, it has been stated that the target for the fleet will be around 92 aircraft.

AeroTelegraph says that this will be divided between 20 long haul aircraft, 60 short and medium-haul jets, and 12 Embraer regional jets.

Making plans for a return to service

Despite Alitalia suspending its last long haul route this week, the airline is already making plans for a return to service post-COVID. In a statement on its website, the airline said that it would be guaranteeing social distancing of one meter on flights, without stating how this would be achieved.

It further said that the wearing of masks would be compulsory, with passengers encouraged to bring their own. Those who arrive without one, however, will not be turned away, as the airline says it is able to provide a free one thanks to the support of the Italian Civil Protection Department.

Onboard service is to be reduced, in a bid to minimize exposure to cabin crew. However, it said that food and drink would still be dispensed in sealed single portions in a way that allows the highest hygiene standards to be maintained. The airline has released a video showing its advice to travelers looking to fly at the moment.

Further efforts to protect passengers include using a jetbridge rather than a bus gate where possible, and when this is not possible, there will be restrictions on the number of people on the bus. Online check-in is encouraged, and temperature screening will be implemented at some airports.

What do you think of Alitalia’s government rescue? Is it enough to save the airline? Let us know your thoughts in the comments.