As the new Italian govt of Paolo Gentiloni hammers away at a rescue plan for beleaguered lender Banca Monte dei Paschi di Siena, it’s suddenly contending with another corporate crisis: the future of Alitalia. Executives from key investor Etihad Airways and Alitalia are set to meet Italian ministers Monday, Etihad carrier said Sunday. The executives will discuss new restructuring measures with development and transportation ministers in Rome, according to people familiar with the discussions. The plan could include as many as 1,600 job cuts, according the people. Time may be running short. Alitalia was notified in December by investors and creditors that it had 60 days to come up with a viable cost-cutting plan. <br/>
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The plug has been pulled on talks between Air Malta and Alitalia for the sale of 49% of Air Malta to Alitalia, with sources confirming that the deal has fallen through. Speculation that the Maltese govt was very close to terminating the Memorandum of Understanding signed in April 2016 has been going on for months, with prime minister Joseph Muscat and Tourism minister Edward Zammit Lewis repeatedly insisting that nothing was cast in stone and alternatives would be considered if the Alitalia deal was not advantageous. Doubts on the deal always focused on whether the agreement would ultimately benefit Air Malta’s employees and the country. “The govt has repeatedly stated that no deal will be signed unless it is beneficial to the airline, tourism industry and the Maltese economy at large,” Zammit Lewis said Saturday. <br/>
Delta Air Lines is expected to kick off Q4 earnings results for US airlines Thursday, as the industry faces a fresh test of its financial resilience amid rising fuel prices and labour costs. The sector has notched 7 consecutive years of profitability, the longest and strongest cycle in what has traditionally been a turbulent industry prone to big booms and busts. While no one is betting on a recession soon and airlines are expected to be profitable this year, some investors are questioning how long the winning streak can last. Delta’s results likely will telegraph the outlook for the sector. The carrier already has warned that higher costs will shrink its operating margin in 2017 from last year’s solid 16.5% performance. Other big carriers are expected to report later this month. <br/>