AAFrequentFlyer

<i>Troubled Italian airline Alitalia has applied for bankruptcy protection as it tries to agree a deal to ensure its long-term survival.

The carrier has sought court protection from its creditors, effectively declaring itself insolvent.

An administrator will be appointed to handle the process, with flights continuing while the firm plans a radical overhaul of its operations.

Losing 2m euros (&pound;1.6m) a day, Alitalia has survived on a 300m-euro state loan.

Plans are being drawn up to split the carrier into two and to sell a stake in a new entity to a foreign airline. </i>

http://news.bbc.co.uk/2/hi/business/7588475.stm

dfr4848

Sooo, the other shoe finally drops. Be interesting to see how this pans out.

Trekker5211

It will be very interesting to see how this pans out.

When I went to Italy in July, I drove past the Alitalia headquarters in Rome. Its parking lots are strewn with tall grass, and the first &quot;A&quot; on the large sign on the top of the building was covered up. It really was an eyesore, and I hope that the one (or two) company (-ies) that buy Alitalia either tear down or clean up the HQ; it just does not bode well for the image of the airline.

AnthonyGA

If the airline is split into two entities, and one is sold &hellip; what happens to the other one?

Since pilots unions were apparently the obstacle to the last sale attempt, perhaps all the equipment will be sold at a profit (the first &quot;entity&quot, and then all the pilots will be laid off (the second &quot;entity&quot.

W9London

That unattractive bits of businesses will remain under the (now bankrupt) Alitalia, to be either sold or liquidated. I believe this includes maintenance and cargo operations.

Interesting to note this is quite similar to what happened to Swissair.

With their aged and fuel-inefficient fleets, I don't see much room for Alitalia being able to sell its metals for profit.

It looks like the existing labour union contracts are with the old Alitalia, so they will need to negotiate the new contract with the succeeding entity.

Lmaev

my family has tickets booked in another month frmo JFK to Rome. Should we re-book on another airline?

AAFrequentFlyer

It's up to the unions at this point. Here is an article dated yesterday:

<i>ROME, Sept 1 (Reuters) - Bankrupt Alitalia's (AZPIa.MI: Quote, Profile, Research, Stock Buzz) cash reserves are dwindling fast and the airline will be liquidated if the latest plan to salvage it falls apart, the administrator overseeing the carrier's bankruptcy warned its unions.</i>

http://www.reuters.com/article/marke...0080901?rpc=44

CathyM

I'm crossing my fingers they're flying at least another week. I'm flying LAX to Rome, then Rome to Madrid September 11.

W9London

So far, five out of nine labour unions representing pilots and flight attendants have rejected the proposed new contracts. So far no news of industrial actions.

The government has given a soft mandate that the unions need to reach agreements over the next week or so--allegedly before the cash runs out.

W9London

Union talks obviously not going well, and the italian consortium just announced they're suspending the due dilligence. Remember, one of their conditions were the unions agreement.

I'm hoping CathyM is not stranded. (Hope she's not flying Alitalia on the return leg...)