The new Alitalia business plan has been approved by the board of directors
The recovery plan of the company includes: reducing costs by 1 billion EURO and increasing revenues by 30%.
On 15 March 2017, Alitalia's new business plan was approved by the board of directors. It will be applied during the 2017 - 2021 period. It includes a series of radical and necessary measures for the profitability and stability of the Italian company.
The management of the company will present the plan and the Italian government, then will meet with the unions to explain the details of the business plan, the measures related to the number of employees and to resume discussions on a new collective labor contract.
Alitalia's new business plan - drastic actions for recovery
The business plan summary contains: reducing costs by 1 billion EURO in the first three years, up to 2019, at the same time revenues will increase by 30%, from 2,9 billion EURO to 3,7 billion estimated.
Cost reduction with 1 billion EURO is made possible by reducing staff costs and optimizing operational expenses. This means that Alitalia will lay off a significant number of employees and renegotiate certain operational contracts.
The actions of the business plan are supported by "four pillars of change": a recalibrated business model, reducing costs and increasing productivity, optimizing the network and relationships with partners, as well as developing business initiatives.
The business plan also includes fleet optimization. This will be reduced with 20 of narrow-body (single-aisle) aircraft. At the same time, several seats will be mounted on the planes in the operational service. The long-haul fleet will increase with a Boeing 777-300ER, which will arrive at Alitalia this summer.
Alitalia intends to increase the number of flights from Italy to the two Americas, a very important market for the Italian carrier, and to develop operations in Milan Linate, Sicily and Sardinia. The company will re-evaluate transatlantic options to increase the number of flights on existing routes and to add new destinations in the two Americas. A series of changes will also be made on short and medium flights from Europe. We remind you that Alitalia has left the Romanian market.
Operational expenses will be optimized, with Alitalia planning to introduce certain on-board payment services. It will migrate to the hybrid area of on-board services on short and medium flights, but will operate with full-service on long-haul flights.
A very difficult period is announced for Alitalia, with drastic actions. But only this way the company will be able to profit until 2019.