Alitalia in Limbo as Paycuts Proposed..

Alitalia employees are set to vote on whether or not to accept a preliminary agreement reached between management and trade unions last week concerning job and pay cuts.

Alitalia management last month indicated that shareholders had conditioned the disbursement of EUR2 billion (USD2.12 billion), needed to sustain a restructuring programme, on unions agreeing to a new collective labour agreement and headcount-related measures. The measures CEO Cramer Ball outlined included the laying off of 2,037 out of Alitalia's 12,500-strong workforce. Pilots were also to be required to take a pay-cut with medium-haul and long-haul flight crew salaries reduced by 28% and 22% respectively. Cabin crew wages were also to be cut by 32%.

However, following marathon talks last week brokered by the Italian Ministry for Economic Development, Reuters reports the two sides agreed to trim the scale of lay-offs to around 1,700 from the original 2,037. Additionally, flight crew wages will only be cut by 8% and not the original 32%.

Given the agreement, government had hoped Alitalia's shareholders would hold a cash-call as early as Friday, April 14. This, however, has been delayed owing to employees having to ratify the agreement before it can take effect. No specific timeframe concerning the vote has yet been announced.

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