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Alitalia board outlines 'survival plan,' calls for 'substantial' capital injection
Monday September 10, 2007
Alitalia's board on Friday outlined financial and performance targets for its "survival/transition" plan that aims to keep the carrier viable through 2010 as it continues to seek a sale to private investors.
Meeting following the collapse of its recent privatization push, the board reiterated its call for a "substantial injection of financial resources," presumably from the Italian government.
The board's plan, set to guide operations from March 30, 2008, through 2010, aims to reduce overall revenue 2.7% and lower costs by 8%. This will be achieved through a "repositioning of long-haul activities and the development of low-cost activities," as well as "improved flight productivity," the board said. The airline plans to carry 28.7 million passengers in 2010, with numbers rising more than 3.8% per year. It expects to carry 25.5 million this year.
Overall capacity will rise1.6% annually, according to the board's plan. Short-haul services will have flat growth over the period as measured in flight hr. while long-haul hr. will grow 5%. Cargo capacity will rise by 4.5% annually.
The board said it has made "first contacts" with "potential investors" and is aiming to complete the carrier's sale "in the shortest possible time." AZ has retained Citigroup as an adviser to help find buyers.
Chairman Maurizio Prato told reporters Friday that by "the end of the month all those potentially interested will be contacted by the adviser." He said there have not been any "shows of interest" so far.
by Aaron Karp