Italy’s embattled air carrier Alitalia will emerge from its state-guided reform plan far smaller than in the past, though government officials said Tuesday the relaunch plan will not involve layoffs.

The latest steps in the relaunch of the company will involve reducing the airline’s fleet to no more than 70 aircraft. That is down from 113 aircraft it had in service last year.

The reduction is a requirement from European competition regulators, who estimate the new company will serve 40-percent fewer passengers in 2021 than it did before the worldwide slowdown of air traffic due to the coronavirus pandemic.

The new company will also employ just 6,500 workers, a reduction of nearly 4,000 compared to current levels. But Minister of Economic Development Stefano Patuanelli said Tuesday there would be no layoffs. Instead, there will be a hiring freeze and the remaining employees will be moved to government payrolls and employed in spin-off companies.

European competition rules require a “discontinuity” from the airline’s previous structure in order for the government support of the airline not to be considered unfair state aid.

The moves come as Italy — and the European Union in general — gradually reopen to travel in the wake of coronavirus lockdowns. Enditem

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