The Italian government is considering a redundancy scheme that may help Alitalia win a much-needed union agreement for its cost-cutting plan.

The government is discussing whether its Cassa Integrazione scheme, designed to help employees affected by redundancy, can be adopted by the transport sector and consequently help Alitalia gain union approval for the carrier's job cutting plan.

The scheme, which sees staff obtaining up to 70% of their salary for several months from the state after being made redundant, will have to be approved by the airline's management and unions. The man now leading the carrier's talks with unions is Alitalia veteran executive Marco Zanichelli.

The government promoted Zanichelli to succeed chief executive Francesco Mengozzi, who resigned after failing to win union support for a business plan aimed at turning around the loss-making flag carrier. This plan includes cutting 1,500 jobs and outsourcing another 1,200.

Several Alitalia unions have taken strike action in recent months to protest against the job cuts and more are in the pipeline. Despite Mengozzi's departure, Alitalia says it is determined to press ahead with labour changes to ensure it can restore the airline to profitability.

The Cassa Integrazione scheme is a compromise that could offer both sides a solution. One of the conditions within the scheme being considered is a mechanism to ensure that staff made redundant by Alitalia would be the first to be taken back if the airline began recruiting again.

Alitalia is aiming to return to profit in 2005 if it can implement its business plan. It has delayed the release of its 2003 results by a few weeks from late March so that a labour deal can be reflected in its prospectus for the year. Alitalia is predicting a loss of €400 million ($495 million) for 2003.

While its labour woes continue, Alitalia says other aspects of the restructuring plan are being implemented. These feature a strategy to boost online sales, discounted travel agency pricing, a new route structure and fleet rejuvenation.


Source: Airline Business