Bankruptcy Protection Filed by Alitalia

Alitalia said on Friday that they have filed for bankruptcy protection, taking their first step of a reshaping plan to rescue the carrier. Their airline said that their board asked the Italian government to appoint them with an administrator, as well as declared insolvency to a court in Rome. Alitalia has had a loss of 3 million dollars every day, being hurt by budget competition, the unprecedented high cost of fuel, and labor unrest. Their shares have been halted from trading for 2 months now. Alitalia said that their debt as of July’s end accounted for 1.172 billion euros. This figure is not inclusive of the 300 million euro government loan, which was given to them in April in order to continue the airline’s operations.

After the announcement from Alitalia, Augusto Fantozzi, an expert in tax law who use to be a Finance Minister, was appointed by the government as the administrator for the airline. Fantozzi was the Economy Minister during 1995 for a government that was headed by Lamberto Dini. Then he was the Foreign Trade Minister in the cabinet of Romano Prodi the year after that. Many who are involved have kept secrets on the negotiations for saving Alitalia, but the plan appears to call for Alitalia breaking up into separate entities. This plan is the government’s latest attempt to sell their stake of 49.9 percent in the carrier, after a failing bid from Air France KLM during the spring.

Get more information at: www.alitalia.com