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The cuts to its workforce of 12,500 employees may be even deeper under administration, as a rescue appears unlikely. Etihad, which owns 49 percent of the carrier, said it wont extend additional funding. It is clear this business requires fundamental and far-reaching restructuring to survive and grow, Etihad Chief Executive Officer James Hogan said in a statement. The plans never panned out as budget rivals Ryanair Holdings Plc and EasyJet Plc further ate into its position in Italy, and a wave of terror attacks in Europe hurt tourism in the region. With the insolvency filing, Alitalias board of directors acknowledged the serious economic and financial situation of the company, the airline said in the statement. The administrators will take over the business and present a new strategy that may entail asset sales, reduced operations and job cuts aimed at making the airline viable within two years. If a turnaround isnt possible, the administrators may order the carrier to be liquidated. The Italian government has already ruled out a bailout. While Etihad flights withdrew financial support, the Gulf carrier said its ready to work with Alitalia as a commercial partner, which effectively means that codeshare agreements continue. Etihad passengers booked on Alitalia flights can proceed with travel plans as normal, it said.

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