Alitalia's management is forging ahead with its restructuring programme, as it prepares for the recapitalisation of the company in October.

The carrier seeks an injection of up to L2,000 trillion ($1.3 billion), and its share price has been outperforming the Italian market average by 20 per cent as speculation builds about interest from foreign banks and investors.

Part of that will come from its sale of Aeroporti di Roma which is expected to raise between L400 billion and L500 billion. Alitalia says it is talking to foreign investors about further financing.

In an effort to streamline the decision making process chairman Roberto Riverso has formed a small executive board comprising himself, managing director Roberto Schisano and three directors of holding company IRI, responsible for planning, personnel and finance. Rumours are also circulating that the top-heavy vice presidential level of 14 will be cut by half.

The carrier has also made progress on the alliances front, signing a codesharing agreement with Canadian Airlines International with a twist. The two carriers will share the Toronto-Rome route seasonally on a block space basis. Alitalia will operate from June to October, while Canadian will take traffic during the low season. Alitalia will join Canadian in Toronto's new terminal three.

On the labour side the pilots, who refuse to give in to productivity demands, are becoming more isolated from public support and other unions, according to a Rome consultant. 'I think management will win. They are near to agreement,' he says. Alitalia, however, is not so optimistic.

Source: Airline Business