Alitalia is to slash its workforce and raise additional capital as part of a plan aimed at making a small profit by the end of 2003.
Backed by the Italian Government, it is to cut 3,400 jobs, including 2,500 compulsory redundancies, from a workforce of 24,000.
The airline also plans to raise €1.2-1.4 billion ($1.06-1.24 billion) in fresh capital over the next six months, in addition to receiving the final €380 million from a previous recapitalisation.
The state-owned flag carrier, which recently entered a strategic alliance with Air France, will also seek government support over the next two years to help offset the cost of restructuring.
Despite an estimated 17% drop in demand in 2002, and an earlier decision to retire a number of Boeing 747s and MD-11s, Alitalia intends to invest €1.5 billion modernising its fleet and reducing aircraft types.
Source: Flight International