Alitalia - Società Aerea Italiana S.p.A.

Alitalia Board approves 2017-2021 business plan

Public disclosure of inside information according to article 17 MAR

Fiumicino (Roma) (pta032/15.03.2017/23:00) - Alitalia Board approves 2017-2021 business plan

- Eur1 billion cost reductions by 2019
- Revenue to increase 30 per cent by 2019
- Profitability by 2019
- Fleet reduced by 20 narrow-body aircraft
- New competitive proposition for short and medium-haul aircraft fleet

Public disclosure of information that qualifies or may have qualified as inside information within the meaning of Article 7(1) of the Market Abuse Regulation.

Alitalia's Board of Directors today approved the airline's turnaround business plan which includes a range of radical and necessary measures across the whole of the company to stabilise it and secure its long-term sustainability.

The plan's funding by the company's shareholders is subject to Alitalia's trade unions agreeing to a new collective works agreement and headcount-related measures.

Airline management will soon present the board-approved plan to the Italian government and then meet with trade unions to explain the details of the business plan, headcount-related measures and resume talks on a new collective labour agreement.

Alitalia said it will reduce costs by Eur1 billion in the first three years of the plan by 2019 with reductions in operating costs and manpower. Alitalia will increase revenues, in the same timeframe to 2019, by 30 per cent from Eur2.9 billion to Eur3.7 billion.

These financial performance indicators are judged to be realistic and achievable by independent advisors and the projected figures would turn Alitalia into a profitable business by 2019.

The business plan actions are supported by 'four pillars of change'; a recalibrated business model, costs reductions and enhanced productivity, optimisation of network and partnership, and develop commercial initiatives by utilising technology investments to drive revenue.

Cramer Ball, Alitalia CEO, said: "With the approval today by the Board of Directors of the second phase of our business plan we can now accelerate our actions towards turning around Alitalia.
We re-built our brand in the first phase and invested heavily in staff training and technology so we are now able to move ahead and implement wide-ranging changes.
The aviation industry is ferociously competitive and never stands still. Only through radical change will Alitalia's fortunes be turned around.
We must transform this business into a dynamic entity that is attractive to customers who have plenty of choice for their air travel needs.
Consumers' buying habits have been shaped by how low cost carriers sell their products. I am confident that the next phase of the industrial plan will represent the step forward needed, provided that all interested parties play their part.