Loss-making Italian airline Alitalia is preparing a major capital increase and a job-cutting plan, which are to be discussed by the group's board on August 30, the company said.
The Italian government failed to privatise the state-controlled company earlier this year because of a lack of bidders, and the latest measures are designed to make the company more attractive to potential buyers. According to Italian press reports, the capital increase will put between 1.0-1.5 billion euros (1.4-2.0 billion dollars) into the company's coffers, while job cuts could number at least 1,000.
The plan would also see the company cut back on flights to India and China and concentrate its activities in the capital Rome rather than the northern economic centre of Milan.
The company currently operates from hubs in both cities, which increases its operating costs. Alitalia, 49.9-percent owned by the Italian state, lost 626 million euros last year and organised a capital increase less than two years ago, at the end of 2005, when it raised 1.0 billion euros.
The company did not say who would invest in the company to inject the new capital and EU state aid rules would prevent the Italian government from taking part.
The Italian state abandoned its privatisation attempts in July after failing to attract suitable bidders, but a new unidentified group of investors declared an interest in buying the company recently.
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