Alitalia seeks bankruptcy measure

Negotiations with unions will be critical to saving the airline

Troubled Italian airline Alitalia has applied for bankruptcy protection as it tries to agree a deal to ensure its long-term survival.

The carrier has sought court protection from its creditors, effectively declaring itself insolvent.

An administrator will be appointed to handle the process, with flights continuing while the firm plans a radical overhaul of its operations.

Losing 2m euros (£1.6m) a day, Alitalia has survived on a 300m-euro state loan.

Plans are being drawn up to split the carrier into two and to sell a stake in a new entity to a foreign airline.

Split in two

Guaranteeing the airline’s future will depend on securing fresh investment and persuading its unions to accept large job cuts.

Both Air France KLM and Lufthansa have expressed interest in investing in any new entity which emerges from the current business.

No one can buy Alitalia in the state it’s in… the business is toast Roberto Colaninno

Earlier on Friday, Corrado Passera, head of the airline’s financial advisers Intesa Sanpaolo, confirmed that Alitalia’s board was drawing up a request to seek bankruptcy protection.

The move will give the firm breathing space to reach agreement on how the business can proceed.

The government adopted new measures on Thursday aimed at speeding up bankruptcy proceedings, widely interpreted as a signal that Alitalia was set for such a course of action.

Future plans for the carrier would see it divided in half, with its loss-making operations remaining under bankruptcy protection and potentially being liquidated.

Profitable short-haul routes would be separated into a new business, controlled by a consortium of Italian investors including budget airline Air One which would effectively be merged with Alitalia.

Italian media have speculated that the new firm will employ 7,000 fewer staff than Alitalia’s current 19,000 strong workforce and operate flights to about 50 fewer destinations.

Italian ownership

Prime Minister Silvio Berlusconi has made Alitalia’s continued ownership by Italian interests a precondition of any rescue deal.

However, experts have said the airline – of which the government owns 49% – can only survive in the future as part of some European alliance.

Silvio Berlusconi wants to keep the airline in Italian hands

Previous attempts to sell the business to a foreign airline have foundered over union concerns about job losses and unease over the severity of the airline’s financial problems.

The airline’s perilous position was put into perspective by Roberto Colaninno, appointed to take charge of the new entity that emerges from the restructuring.

“No one can buy Alitalia in the state it’s in,” he told La Repubblica newspaper.

“With all respect, I am not Merlin the magician. The business is toast. It doesn’t exist any more. There’s nothing left.”

Alitalia has been crippled in recent years by strategic indecision, poor industrial relations and soaring fuel costs.

Its shares were suspended earlier this summer while the firm has delayed the release of its 2007 accounts.

Italy police probe monastery raid

Police suspect the attackers were looking for money

Italian police are investigating a brutal attack on four Franciscan friars in a monastery in northern Italy.

Italian media are comparing Tuesday’s attack, at the San Colombano Belmonte monastery near Turin, to the violence in the story A Clockwork Orange.

Three or four hooded attackers entered the monastery and bound and gagged the friars, the oldest of whom was 86.

One managed to raise the alarm two hours later, when he regained consciousness after being beaten.

“They unleashed an incredible level of violence against them,” Gabriele Trivellin, in charge of Franciscan friars in the area, told the Corriere della Sera newspaper.

“It was wild and gratuitous violence because they did not resist the attack at all,” he said.

The youngest friar injured – 49-year-old Sergio Baldin – is currently in hospital in a coma after suffering severe head injuries. The other three, who range in age from 76 to 86, are expected to be released from hospital in a month.

Police believe the motive may have been robbery, as some cash was stolen from the monastery during the attack.

But the only object of great value in the building – a golden crown which decorates a statue of the Madonna – was placed behind protective glass after the original was stolen two years ago.

Migrants rescued off Italy coast

Some 12,000 people have arrived in Lampedusa since January

Italian vessels have rescued at least 250 would-be migrants from boats and vessels off the coast of Italy.

The navy rescued at least 175 people, believed to be from Eritrea, Ethiopia and Somalia from three vessels, 190km (120 miles) south of Lampedusa island.

A further 72 people – including seven women and a child – were rescued from a rubber dinghy by the coastguard.

Local politicians say Lampedusa is facing a crisis with 12,000 would-be migrants brought ashore since January.

Dangerous journey

The Italian navy agreed to rescue those onboard the three vessels after they ran out of fuel and water in Libyan territorial waters.

The UN refugee agency, the UNHCR, had appealed to Malta, Libya and Italy to rescue the stranded vessels.

A UNHCR spokesman told Reuters news agency he believed some 25 women and six children were among those on board.

Those rescued from the dinghy 80km south of Lampedusa included seven women and a child, Italian media report.

Thousands of Africans risk their lives to make the perilous journey each year, many leaving in makeshift vessels from Libya hoping to gain entry to Europe via Italy or Malta.

Last year, according to rights watchdog the Council of Europe, some 51,000 migrants arrived by boat in Italy, Spain, Greece and Malta, many of them asylum seekers and refugees who lack legal avenues to enter Europe.

Emergency services in Italy have warned that crowded holding centres in the country are on the verge of collapse, worsening a state of emergency declared by the Italian government over immigrants.