Aviation: End of the road? Alitalia files for Chapter 15 bankruptcy in the US
Alitalia has filed for bankruptcy protection in the United States in a bid to keep its leases at New York JFK airport.
The airline which is currently surviving on an Italian government loan as it seeks buyers – has been granted a temporary restraining order until June 23, offering it a short period of protection from creditors.
Chapter 15 allows foreign companies protection under the United States Bankruptcy Code as they undergo insolvency proceedings in their own country.
The temporary relief will allow Alitalia to continue its operations to the US, which the airline says is “critical to its overall operations”. In a filing, Alitalia said that without protection it could lose its terminal lease at JFK, flights to which account for 15% of its revenues. The filing also said that the airline faced the imminent termination of its telephony and internet services.
A hearing is scheduled for June 26.
Alitalia entered into special administration in Italy on May 2 with liabilities of around EUR2.3 billion (USD2.5 billion) after a restructuring plan failed to win over its labour force.
The Italian carrier currently offers 9x daily flights to the United States, flying Milan Malpensa – New York JFK, and Rome Fiumicino to each of Boston, Chicago O’Hare, Los Angeles Int’l, Miami Int’l and New York JFK.