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AIR FRANCE

Alitalia in crunch talks to fend off bankruptcy

Italian airline Alitalia holds a crunch meeting on Friday to vote on a recapitalisation plan that would save it from imminent default and avoid its planes being grounded by the weekend.

Published: 11 October 2013 07:46 CEST
Alitalia in crunch talks to fend off bankruptcy
Photo: Arpingstone/Wikicommons

The national postal service was brought in at the last minute on Thursday and Italian media said it could stump up €75 million in a planned €300 million capital increase.

The airline could also seek a €200 million loan.

Claudio Tarlazzi of the UIL Trasporti union said the company was not planning to repay a €95 million loan from its shareholders.

Poste Italiane's investment would give it a stake of between 10 and 15 percent in the troubled airline, Italian news agency ANSA reported.

The current shareholders are a consortium of Italian companies which hold a majority and French-Dutch carrier Air France-KLM which owns 25 percent and would like to boost its stake.

The government in a statement expressed "satisfaction" over Poste Italiane's move but Transport Minister Maurizio Lupi said the involvement was an "intermediate solution".

"Now the integration with a foreign partner can be faced in a condition of parity," he said, after weeks of talks with unions and management at Alitalia, which employs 14,000 people.

The plan still has to be formally approved by the board of directors on Friday and by an extraordinary shareholder meeting next week.

Bankruptcy for Alitalia, which already had to be bailed out five years ago, would be a major embarrassment for Prime Minister Enrico Letta as he tries to persuade investors to come to Italy and persuade Italians that the country is on the point of shaking off a two-year recession.

Alitalia "is a strategic asset for the country but not without conditions," the government statement said, adding that there would have to be "a major overhaul of the industrial plan".

Without a rescue, Alitalia would face the humiliation of having its jet fuel supplies cut off by energy major Eni starting on Saturday because it wants its debts paid back.

"There needs to be a recapitalisation or on Saturday Alitalia will have to stay on the ground," Vito Riggio, head of Italy's civil aviation agency, said on news channel SkyTG24.

"If a company does not have the funds to meet its commitments, there is no choice," he said.

Alitalia already owes ENI around €30 million.

Trade unions have pleaded with the government to bring in a major public investor to rescue Alitalia but Italy has to be careful not to infringe European Union rules on state subsidies.

They have accused Air France-KLM of trying to engineer a bankruptcy to serve its own interests.

Air France-KLM has said it would like to be more involved but only under certain conditions.

"Our conditions for helping Alitalia are very strict," Air France-KLM chief Alexandre de Juniac told France's Les Echos newspaper last week.

"If the conditions are there, I am ready to go ahead. If not, we won't be able to do it."

Alitalia "is a company that is making a lot of effort but still has major weaknesses," he said.

"It would become Air France-KLM-Alitalia one day if we join together – a very big European home".

The French carrier Air France has its own troubles and is involved in a deep restructuring plan. The Air France-KLM group as a whole is set to become profitable again by the end of 2013.

Air France-KLM has tried to buy Alitalia in the past but the proposed deal was blocked by the government at the time and would prove hugely controversial in Italy where recent takeovers by foreign companies have been criticised.

Alitalia reported net losses of €294 million in the first half, compared to a €201 million loss over the same period in 2012.

The company has also said it managed to reduce its overall debt to €946 million by June 30th of this year from €1.023 billion in March.

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BANKRUPTCY

Half of Swiss hotels, restaurants risk bankruptcy: employer group

Nearly half of Switzerland's restaurants and hotels risk bankruptcy within months failing financial support to weather devastating Covid-19 measures, the sector's employer group warned Sunday.

Published: 11 January 2021 08:00 CET
Half of Swiss hotels, restaurants risk bankruptcy: employer group
Closed restaurants face bankruptcy in Switzerland. Photo by AFP

The Swiss government is expected this week to extend the closure of bars, restaurants and leisure facilities across the country until the end of February to control stubbornly high coronavirus case and death numbers.

But industry federation GastroSuisse warned in a statement that if done  without providing significant financial support, around half of businesses in the restauration and hospitality sector could go belly-up by the end of March.

The group polled around 4,000 restaurant and hotel owners, and determined that 98 percent of them already are in urgent need of financial support.

“The very existence of many of them is threatened,” GastroSuisse president Casimir Platzer said in the statement.

While restaurants and other businesses quickly received financial support when Switzerland went into partial lockdown during the initial wave of infections, GastroSuisse has complained that support during subsequent sporadic closures has lagged.

Before the crisis, more than 80 percent of Swiss restaurants and hotels were in a good or very good position of liquidity, the study showed.

But that situation quickly deteriorated.

In October, as a second wave of infections picked up steam, the organisation cautioned that 100,000 jobs were at risk.

And during the final two months of 2020, nearly 60 percent of restaurant and hotel establishments were forced to conduct layoffs for a second time, it said.

Without government intervention, a third wave of layoffs is looming, Platzer warned.

The latest closures were to be lifted on January 22, but the government said last week it wanted to extend the deadline for a further five weeks.

GastroSuisse said the final announcement, due Wednesday, needed to be
accompanied by “immediate and uncomplicated” financial support to the sector
to avoid “disaster”.

USAM, a union that represents small and medium-sized businesses in Switzerland, called Sunday for the government not to prolong or tighten measures, warning it was an “existential question” for many of its members.

Switzerland, a country of 8.6 million people, is currently registering around 4,000 Covid-19 cases a day and had by Friday seen nearly 476,000 cases and 7,545 deaths since the start of the pandemic. 

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