Italian post service chips in for troubled Alitalia

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Alitalia has launched a vast restructuring plan with €300 million in budget cuts. Photo: Leandro Ciuffo/Flickr
13:17 CET+01:00
Italy's postal service will take part in a much-needed capital increase for Alitalia, Italian media said on Thursday, amid reports that UAE carrier Etihad is preparing a big investment in the troubled airline.

The decision to chip in €75 million to the €300 million increase was taken during a meeting of the state firm that ended in the night between Wednesday and Thursday, the reports said.

Post officials contacted by AFP could not confirm.

SEE ALSO: Etihad preparing offer for Alitalia: report

Flag carrier Alitalia is badly indebted and has also launched a vast restructuring plan with €300 million in budget cuts and the reduction of 1,900 jobs.

The remaining €225 million in the capital increase have already been contributed by Alitalia's existing private sector investors and by banks.

Air France-KLM, which was until now was the main shareholder with 25 percent, has declined to contribute and will see its share greatly diluted.

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The capital increase plan was formulated in October and November under pressure from the Italian government but the postal service's participation has been widely criticized as a possible state subsidy.

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