Alitalia approves new business plan, Air France-KLM unconvinced
By Alberto Sisto
ROME (Reuters) - The board of Alitalia on Wednesday approved a revised business plan, promising severe cost cuts to make the Italian airline more profitable, but its new strategy failed to convince top shareholder Air France-KLM (AIRF.PA: Quote).
The Franco-Dutch group, which owns 25 percent of Alitalia, voted against the plan, a source close to the matter said.
"Air France welcomed the plan, but the problem with the debt remains, so they voted against it," the source said.
Air France-KLM declined to comment.
Alitalia said in a statement that the revised industrial plan would include "severe cost cuts", but did not mention any of the heavy job losses of up to 2,000 and salary cuts that sources this week said were part of the proposals on the table.
However, the company said it would cut the number of its medium-range aircraft and increase the number of international and intercontinental flights as it seeks to boost revenues by focusing on the more lucrative long-haul market.
The board also approved an extension to November 27 of a Friday deadline for shareholders to subscribe to a 300 million euro ($402 million) capital increase needed to boost its coffers.
The Italian airline is wrestling with losses and is stuck in a months-long tussle with Air France-KLM over whether they want to keep their strategic and financial partnership alive. Continued...