Alitalia is implementing a restructuring plan aimed at returning the airline to profitability by 2019. As part of these measures, the Italian carrier will reduce its workforce by roughly 2,000 permanent and temporary positions.
“Headcount reductions are a painful but necessary action that, alongside other cost reductions, will stabilize our financial situation and create long-term sustainability,” said Cramer Ball, CEO of Alitalia, in a press release. “These changes are essential if we are to compete effectively in the extremely tough European aviation market. Together with trade unions, and with the support of the Italian government, we will work respectfully and fairly at ways in which to minimize the impact of the business plan on our people.”
The layoffs are expected to help cut costs by €1 billion over the next two years. At the same time, Alitalia plans to grow revenue from €2.9 billion to €3.7 billion in that period by introducing more competitive pricing to better contend with Europe’s low-cost carriers.
In addition to staffing adjustments, the airline will introduce additional ancillary fees, including charges for seat selection, checked baggage and priority boarding, to diversify revenue streams.
Industry reports indicate that Alitalia has been losing at least €500,000 per day, creating urgent pressure to stabilize finances and improve operational efficiency.
Union leaders have criticized the proposed restructuring and announced a 24-hour strike scheduled for April 5 in response to the company’s plan.