Europe

Italian airline Alitalia heads toward reorganization

Associated Press
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FILE - In this Monday, March 20, 2017 file photo, an Alitalia plane comes in for landing at Linate Airport, in Milan, Italy. Italy’s struggling flagship airline, Alitalia, headed toward its second period of receivership in a decade on Tuesday, May 2, 2017 with the board of directors saying it had no choice after workers overwhelmingly rejected a relaunch plan that would have unlocked new investments. The board expressed “deep regret” that workers had voted against the government-brokered relaunch plan, which had softened planned job and salary cuts but was criticized for not having realistic strategy for reviving revenue. (AP Photo/Antonio Calanni, File) (The Associated Press)

FILE - In this March 25, 2009 file photo, an Alitalia Airbus A320 is parked at the Linate airport in Milan, Italy. Italy’s struggling flagship airline, Alitalia, headed toward its second period of receivership in a decade on Tuesday, May 2, 2017 with the board of directors saying it had no choice after workers overwhelmingly rejected a relaunch plan that would have unlocked new investments. The board expressed “deep regret” that workers had voted against the government-brokered relaunch plan, which had softened planned job and salary cuts but was criticized for not having realistic strategy for reviving revenue. (AP Photo/Antonio Calanni, File) (The Associated Press)

The board of Italian carrier Alitalia says it's filing for extraordinary administration as a result of unions' rejection of a plan to relaunch the struggling company.

The board expressed "deep regret" Tuesday that workers overwhelmingly rejected a government-brokered relaunch plan, which had softened planned job and salary cuts. The board said the outcome made it impossible to unlock the planned 2 billion euros ($2.2 billion) in investments from both managing shareholder Etihad and a consortium of Italian companies that control a 51-percent stake. The company will therefore need to be reorganized, the board said.

Italy's economic development minister has said that the period of extraordinary administration, which is designed to help companies avoid failure, is expected to last about six months, during which a buyer would be sought.