DALLAS — Former Italian flag carrier and icon of a bygone era of luxury air travel, Alitalia has begun collective dismissal procedures for its remaining 2,059 employees.

As reported by airline unions to administrators, this final round of layoffs, part of special administration measures toward final liquidation Alitalia, are set to take effect in January 2025 and will impact over 1,100 flight attendants and 82 pilots.

This is the latest development stemming from challenges faced by ITA Airways (AZ), Alitalia’s successor, as it tries to finalize its merger with Lufthansa (LH).

Last week, negotiations stalled due to the Italian Ministry of Economy’s rejection of LH's proposal to lower the price for a 41% stake in the successor airline.

Lufthansa contends that AZ, which is owned by the Italian state, has experienced a decline in value due to its poor performance in Q4 2024—hence the difference of €10 million from the initially agreed price.