New Alitalia will have 150-aircraft fleet

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Plans to revamp Italian national carrier Alitalia will reportedly see the airline predominantly focus on short- and medium-haul routes and operate with a fleet cut by more than a third on the combined current Alitalia and Air One fleet.

Details of the proposals for reviving the cash-strapped carrier's fortunes are expected to be disclosed today following yesterday's meeting of the Italian cabinet, ahead of a key Alitalia board meeting. Privatisation advisor Intesa Sanpaolo has, for some time, been leading moves to put together a consortium of Italian investors, and the emerging entity is expected to operate a separated debt-free Alitalia and involve fellow Italian carrier Air One.

Widespread reports in the Italian media say the plan envisages the new company reaching profit by 2011 and will lock the Italian investors in until 2013.

Italian daily La Repubblica reports the carrier will concentrate predominantly on short- and medium-haul routes, cutting its long-haul routes to 15. It also envisages the airline operating from six bases across Italy - Milan, Rome, Venice, Turin, Naples and Catania - and cutting destinations served by around a quarter.

The paper also reports the combined fleet will be cut by 36% to 153 aircraft by 2009, with the new company taking on some Alitalia aircraft and Airbus jets from Air One.

The Italian investment is reportedly conditional not only on existing debts staying with the old company, but Alitalia unions backing the deal.

Previously Air France-KLM withdrew a conditional takeover offer for the carrier after failing to secure support from Alitalia's unions. It is not yet clear how many jobs would be cut under the proposed slimmed down Alitalia operation.