News & Current Affairs

September 18, 2008

Deadline looms for Alitalia deal

Deadline looms for Alitalia deal

Alitalia air hostesses and employees demonstrate at Fiumicino airport near Rome, 17 September 2008

Union protests forced the ailing airline to cancel 40 flights on Wednesday

A consortium of investors has warned Italian trade union leaders they have just hours to accept a rescue plan for failed national airline, Alitalia.

The consortium said if the acceptance did not come before an investors’ meeting at 1400GMT on Thursday, the package would be withdrawn.

The deal would include longer working hours and 3,000 job cuts.

Union protests forced Alitalia, which is losing 2.1m euro ($3m; £1.7m) daily, to cancel 40 flights on Wednesday.

The carrier, which is operating under a bankruptcy commissioner, faces liquidation if a deal is not reached.

The airline says it is running out of money to buy aviation fuel.

Under the rescue proposal, the Italian consortium has put forward a 1bn euro offer for the airline.

Alitalia would merge with Air One, the country’s second largest airline, and its 1.2bn euro debt would be absorbed by a second firm, which would then be liquidated.

Disgruntled pilots

Italy’s four main union organizations – CGIL, CISL, UIL and UGL – have already signed up to the agreement with the consortium CAI, but five other unions have rejected the deal as “useless and provocative”.

Alitalia plane

The new Alitalia would employ about 12,500 people

Those opposed to the package – SDL, ANPAC, UP, ANPAV and Avia – include pilots and cabin crews.

The new Alitalia would employ about 12,500 people including 1,500 pilots, 3,300 cabin staff and 7,650 technicians, workers and managerial staff, Italy’s Ansa news agency reported.

Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia, in which the Italian government holds a 49.9% stake.

In April, plans for the airline to be bought by Air France-KLM collapsed.

Alitalia suspended trading in its shares in June and filed for bankruptcy protection last month.

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September 14, 2008

Alitalia crisis meetings restart

Alitalia crisis meetings restart

Alitalia plane

Time is running out to save Alitalia

Emergency talks to prevent the collapse of Alitalia have restarted in Rome after the airline warned it may have to start canceling flights from Monday.

With the airline saying it is running out of money to buy aviation fuel, the government needs to persuade unions to back a deal that involves job cuts.

The only offer on the table is from Italian consortium CAI, which only wants Alitalia’s profitable operations.

Unions have so far rejected this deal as it would mean major job losses.

Yet with the only alternative now increasingly looking like Alitalia’s total collapse and the loss of all 20,000 jobs, the unions now appear more willing to back down.

‘Cautiously optimistic’

We are trying to get a solution to this saga and there are still many obstacles, but the climate is different and there is the awareness that there is no alternative to the deal,” said Giuseppe Caronia, head of the UILT union.

“I am moderately and cautiously optimistic.”

Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia.

Securing the airline’s future was one of his main election pledges before he returned to power in May.

Failed French takeover

Back in April, plans for Alitalia to be bought by Air France-KLM collapsed due to union opposition to planned job cuts.

Italy’s civil aviation authority said on Saturday that Alitalia’s operating licence was at risk due to the airline’s admission that it was running out of funds to buy fuel.

Alitalia is currently being run by administrators after seeking bankruptcy protection on 29 August.

The Italian government owns a 49.9% stake in Alitalia, but it cannot simply pump public funds into the airline as there are strict European Union rules preventing state support for airlines.

September 13, 2008

Alitalia ‘running out of fuel’

Alitalia ‘running out of fuel’

Alitalia plane

Negotiations with unions will be critical to saving the airline

Italy’s troubled national airline, Alitalia, cannot guarantee flights beyond Sunday because of a lack of funds to buy fuel, a top official says.

“Until the end of tomorrow, flights are guaranteed. From Monday, they are not,” Augusto Fantozzi, Alitalia’s bankruptcy administrator, told unions.

Mr Fantozzi was speaking as he called the unions to emergency talks a day after the latest session broke down.

Prime Minister Silvio Berlusconi blamed “political” motives for the failure.

He said he would do all he could to save Alitalia from collapse.

“The executive is always ready… to give all the possible support to get to the only solution possible to avoid the airline going bust,” he told the Italian news agency Ansa.

Italian investment consortium CAI, which was poised to take over the company’s profit-making parts, walked away from talks with the unions on Friday, accusing them of intransigence.

CIA chief executive Rocco Sabelli said on Saturday it was not ready to make any further concessions.

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