Posted on July 02, 2016

Italian airline Meridiana will lay off a third of its staff and dock pilot salaries by 20 percent as part of a proposed stake sale to Qatar Airways. The Sardinia-based airline, with trade unions and the Italian government, has agreed a package of cuts required to allow the deal with Qatar Airways to go ahead, according to an official statement from Italy.

Under a Memorandum of Understanding (MoU) between the parties in February, Qatar’s state airline would take up to 49 percent of a new holding company, while Meridiana’s parent company the Aga Khan Fund for Economic Development (AKFED), through Alisarda, would retain majority ownership of at least 51 percent. Qatar Airways revealed earlier this month that the talks with Meridiana had stalled due to disagreements over working conditions.

Meridiana had previously warned that, if the unions did not agree to the deal, a far greater number of jobs – more than 955, according to a statement from Meridiana in April —would be lost. However, Qatar Airways announced last week that negotiations had resumed. In a statement on its website on Wednesday, the Italian government said unions have agreed to a package of redundancies and pay cuts in lines with the discussions.

Meridiana’s 1,600-strong workforce would be axed by 396, representing a reduction of one third, the statement said. The job cuts include 325 cabin crew with the remainder a mix of ground staff and maintenance personnel. A further 250 staff have already taken voluntary redundancy, according to reports. There will also be pay reductions of around 20 percent for pilots and cabin crew and employment contracts will be reduced from five to three years, according to the statement.

Under the deal, Qatar and Italy are to consider further traffic rights to expand Qatar Airways’s Doha-Milan-Chicago route. Transport minister Graziano Delrio said: “The business plan is robust and, subject to agreement, provides for the possibility of re-employment [of staff] instead of a scenario that could have been much more painful for workers and routes.” Italy’s deputy minister for economic development, Teresa Bellanova, added that the government would continuously monitor how the agreement was being implemented.

Meridiana has not made a profit since 2008 and is reportedly being kept afloat by its parent company, AKFED. The airline has been contacted for comment. A spokesperson for Meridiana was quoted as telling news website ATWOnline: “The [Italian] government, Meridiana and the unions have signed a framework agreement in which the unions agreed a new labour contract. “This is one of the pillars [required] to go into the future with Qatar Airways and was one of the conditions of the MoU [between the two airlines].”

source: Arabian Business