Alitalia restructure needed before Lufthansa sale

Alitalia restructure needed before Lufthansa sale

Significant restructuring is needed at Alitalia before Lufthansa would be prepared to buy the airline.

The warning came from the German carrier’s chief executive Carsten Spohr in a letter seen by Reuters.

“While recognising the valuable measures that have been undertaken to date… we strongly believe that there remains a considerable amount of work to be achieved before Lufthansa would be in the position to enter comprehensively into the next phase of the process,” the letter to Italian industry minister Carlo Calenda reportedly said.

Spohr said a restructured “NewAlitalia” would be smaller in terms of both staff and its fleet.

Alitalia has around 9,200 full-time staff, plus a further 1,600 in a state-backed temporary layoff scheme. Any permanent job cuts would be particularly sensitive ahead of a national election in March.

Italy has said it aims to strike a deal before a national election in March.

A person familiar with the matter has said the commissioners managing Alitalia were hoping to agree exclusive talks within the coming days.

Spohr said in the letter that he saw “considerable merit” in developing the opportunity to add Alitalia to Lufthansa’s stable of airlines but that the German group was not in position to play a leading role in the Italian company’s restructuring.

“We therefore strongly recommend and indeed encourage the commissioners to start implementing key restructuring measures which would be common and beneficial to all prospective bidders,” he said.

The Italian flag carrier, which has made a profit only a few times in its 70-year history, was put under special administration last year after staff rejected a plan to cut jobs and salaries.

A source close to the matter had told Reuters in November that Lufthansa had offered €250 million to take on most of Alitalia’s fleet of aircraft and half of its staff.

Lufthansa had offered to keep around 90 to 100 Alitalia aircraft, down from a fleet of 123.

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