ROME — Italy’s former national airline, Alitalia, is initiating the process for the collective dismissal of its last 2,059 employees, as informed by its administrators to labor unions.

This decision comes at a time when ITA Airways, the airline that succeeded the now-defunct Alitalia, is encountering difficulties in its proposed merger with German airline Lufthansa.

Media reports from Italy indicate that discussions regarding the merger have hit a standstill after the Italian Economy Ministry rejected Lufthansa’s requests to modify the pricing for a 41% ownership stake in ITA Airways.

Lufthansa has expressed concerns that the government-run Italian airline may decline in value due to disappointing performance in the fourth quarter of the year.

The airline emphasized its commitment to the conditions set forth in the 2023 agreement related to its investment in ITA, noting that it has completed the necessary package of remedies within the agreed time frame.

On a parallel note, Alitalia, which is currently under special administration and moving toward a final wind-down, is set to terminate its remaining employees by the end of the calendar year.

These impending layoffs will encompass over 1,100 flight attendants and 82 pilots, and are scheduled to take effect in January, as outlined in a letter dispatched this past week to airline unions by the administration.