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BUSINESS Friday 17 March 2017
A25

Alitalia unveils survival plan of deep cuts, budget flights

with Alitalia CEO Cramer ing revenues by 30 percent
Ball. from 2.9 billion euros to 3.7
Under the plan, Alitalia will billion euros.
introduce services com- Cramer said he intended
mon to budget carriers to meet with unions as
on flights of less than four soon as possible to discuss
hours, including charges “headcount related mea-
for meals, priority board- sures.”
ing and preferred seating, The airline also said it was
while retaining the full-ser- in talks with suppliers, in-
vice model for longer-haul cluding in-flight catering
flights. and airports themselves,
“Consumers’ buying hab- to renegotiate costs. It also
its have been shaped by plans to refit its narrow-haul
how low-cost carriers sell plans with extra seats while
their products,” Ball said in reducing that fleet by 20
a statement after the plan aircraft.
was approved Wednes- The board also approved
day night. “The radical and a delegate from big Italian
Alitalia, left, and Air France, right, planes are parked on the tarmac at the Fiumicino airport in necessary measures across banks that own a stake in
Rome. Italian flagship airline Alitalia presented Thursday a new business plan that includes 1 billion the entire airline will secure the airline as a new mem-
euros (dollars) in cost-cutting in a bid to compete with low-cost carriers. our long-term sustainabil- ber. Luigi Gubitosi, a former
(AP Photo/Luca Bruno) ity.” head of RAI state televi-
The airline noted that bud- sion, will become execu-
COLLEEN BARRY billion euros (dollars) in cost- a controlling stake in the get carriers had captured tive chairman once share-
AP Business Writer cutting in a bid to compete long-troubled airline.
MILAN (AP) — Italian flag- with low-cost carriers. “We have a lot of work to nearly half of the Italian holders approve funding
market, the highest share in for the new plan, the airline
ship airline Alitalia present- The new plan comes nearly do,” Transport Minister Gra- Europe. said. The move is expected
ed Thursday a new busi- three years after Abu Dhabi ziano Delrio said in Rome The plan envisions reach- to pave the way for the exit
ness plan that includes 1 carrier Etihad Airlines took after a one-hour meeting
ing profitability by 2019, in- of Chairman Luca Cordero
American housing starts rose in February cluding cutting operating di Montezemolo.q
and personnel costs by 1
billion euros while increas-

JOSH BOAK months of 2016. Builders last 4.7 percent. Yet buyers will
AP Economics Writer year started the most new likely borrow at higher rates
WASHINGTON (AP) U.S. homes since 2007, the year than last year, a factor that
builders broke ground on the Great Recession be- could restrict the extent of
new homes at a faster gan as the housing market price and sales growth.
pace in February, a sign began to teeter. The average 30-year fixed
that developers expect Construction surged last rate mortgage had a 4.21
solid sales growth this year month in the West, offset- percent interest rate, mort-
despite higher mortgage ting declines in the North- gage buyer Freddie Mac
rates. east, Midwest and South said last week. This marks
Housing starts rose 3 per- that were largely caused a steep increase from a
cent last month to a season- by a decline in apartment 52-week low rate of 3.41
ally adjusted annual rate of building starts. percent.q
1.3 million, the Commerce Still, growth in home build-
Department said Thursday. ing also appears to be
Almost all of those gains tempered. Building per-
came from construction of mits_an indicator of future
single-family houses, which home construction_slipped
rose 6.5 percent. Construc- 6.2 percent in February to
tion of apartment buildings an annual rate of 1.2 mil-
fell 7.7 percent in February. lion.
More Americans are look- Builders have been adding
ing to purchase homes supply to the market, just
as the job market has im- not enough to address the
proved, but the supply of tight inventory of existing
properties for sale has been homes that make up the
relatively low even with ad- bulk of the real estate mar-
ditional construction. The ket. The National Associa-
increase in construction tion of Realtors has report-
starts points to greater sales ed that the number of ex-
this year even though mort- isting homes on the market
gage rates have climbed is near its lowest level since
upward from recent lows, 1999, while the inventory of
making monthly housing new homes on the market
payments higher and hurt- is near an eight-year high.
ing affordability. Demand among home-
Housing starts are running buyers has been strong as
7.5 percent higher than the unemployment rate
they did during the first two has dipped to a healthy