Minister: Alitalia might not last a week

ROME: Alitalia might stop flying within a week if unions don’t change course and accept a rescue plan offered by Italian investors, Italy’s transport minister said Sunday.

The only hope for the survival of Italy’s bankrupt flagship airline is for union leaders to agree to the investors’ terms, and for the government to convince the investors to put the deal back on the table, Minister Altero Matteoli told Sky TG24 TV.

“Alitalia has only very few days left, surely less than a week,” unless a deal is made, he said.

The investors withdrew their offer to acquire some of Alitalia’s more potentially profitable assets after some unions, including pilots’ representatives, rebuffed the deal.

Other unions for Alitalia employees have accepted the plan, which calls for some 3,250 layoffs among the airline’s 20,000 workers, the elimination or reduction of loss-making routes and the sale of many aircraft.

The main union confederation leader who refused the investors’ offer said Sunday his group would return to the table if Alitalia’s bankruptcy administrator were involved in negotiations.

So far, talks had not involved Alitalia directly, but if administrator Augusto Fantozzi plays a role in negotiations, “it could open up an interesting way out of the impasse,” CGIL union leader Guglielmo Epifani said on state TV.

Separately, Fantozzi has been summoned by Italy’s National Civil Aviation Agency to a meeting Monday to see if the airline’s license to fly should be yanked.

Anpac pilots union president Fabio Berti said it was up to the investors to make the terms less harsh.

They’re offering “the same contract that pilots have with Air France, with Lufthansa, with British Airways, but with 30 percent less pay,” Berti said in an interview on Sky TG 24 TV.

The pilots have agreed to the lower pay, but spurn other concessions, including less vacation time than maids receive under their national contract.

“We’ve said we are willing to make sacrifices,” Berti said.

Alitalia appeared close to a deal with Air France-Lufthansa last spring. But conservative leader Silvio Berlusconi, in his successful run for another term as premier, promised that if elected he would keep Alitalia “Italian.”

The media mogul, who went on to win, boasted that he would line up Italian investors to acquire the company. Unions then rejected Air France-KLM’s terms.

After the Italian investors were rebuffed last week, the premier said that big foreign airlines were sounded out but no one was interested.

The rescue plan would break Alitalia into two, with profitable assets merged with Italy’s second largest airline Air One. The investors’ group, known as CAI, is led by Piaggio chairman Roberto Colaninno. It has promised to inject 1 billion euros ($1.4 billion) into the new company.

Unprofitable assets would be liquidated.

With the Italian government holding a 49.9 percent share in Alitalia, consumer groups and some opposition politicians are worried taxpayers could wind up paying the bill on losses.

European Union competition rules have crimped whatever bailout aid the government could give Alitalia.

Published: September 21, 2008

Source: International Herald Tribune

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