Although the Italian government reduced its stake in Alitalia below 50% in its recent recapitalization (ATWOnline, Nov. 14, 2005), new Transport Minister Alessandro Bianchi felt justified in calling for a change in management at the struggling flag carrier, which reported a widened ?156.6 million ($200 million) first-quarter loss last week that it attributed largely to the impact of protests by Alitalia Servizi workers.The airline said bad weather and the January strikes knocked ?80 million off operating revenues and ?40 million off the operating result.

Bianchi is part of the new center-left government of former European Commission President Romano Prodi elected last month. "I am not fond of the formula 'change the government, change the management.' But it is clear that even this needs to be discussed, because if there are things that are not working, the management should have the answers," Bianchi told the ANSA news agency. "We know only that the accounts of this company have worsened lately and we should understand why." He added that the position of AZ President and CEO Giancarlo Cimoli was "necessarily one of the subjects under discussion."

In addition to the first-quarter deficit (ATWOnline, May 17), Alitalia reported a 3.1% decline in revenues to ?965 million and said it would be "opportune" to wait until the end of the current quarter and for a thaw in its labor relations before making a full-year forecast. The company's Business Plan 2005-2008 targeted a return to profitability in 2006.

Separately, the airline's main trade unions sent a letter to the new parliament and government noting that full-year and first-quarter results show that the carrier's "health conditions remain very harsh," AFX reported. Unions reportedly also sent a letter to management warning of possible new strike actions. The unrest is related to Alitalia's failure to apply the same contract conditions to employees of the Servizi unit