Skyteam news

[Pieter C. 5]

Alitalia To Ditch Troubled Units, Eyes Rescuer

 

August 22, 2008

Italy's latest plan to rescue Alitalia includes seeking bankruptcy protection for its troubled units before resuming the hunt for a foreign partner, a political source said ahead of a crucial week for the stricken airline.

 

After sputtering through the summer thanks to an emergency loan, Alitalia is expected to admit it has sunk deeper into the red when it reports first-half results next week, when Italy's cabinet is also expected to address the airline's fate.

 

A list of Italian investors for a reshaped Alitalia stripped of its loss-making units could also be unveiled as early as next week, another source close to the situation said.

 

Italy is also studying British Airways, former bidder Air France-KLM and Lufthansa as potential partners for an eventual alliance, the source said.

 

However, British Airways, which has not previously been involved in Alitalia's long-running sale, would not consider a partnership with Alitalia, an industry source said. A BA spokeswoman said it did not comment on market speculation.

 

Air-France-KLM and Lufthansa had no comment.

 

"Air France is an international option being studied along with Lufthansa and British Airways," the source close to the situation said on condition of anonymity.

 

This source added it was not clear whether any of the foreign airlines had been approached to partner Alitalia under the latest plan being put together by adviser Intesa Sanpaolo.

 

After two failed attempts at finding a foreign alliance for Alitalia, Lufthansa has emerged as the top contender for a stake in a reshaped Alitalia, the government source said. The German carrier has not bid in the Italian government's previous efforts to sell Alitalia but has said the Italian market remains important.

 

The choice of the previous government -- Air France-KLM -- watched its purchase of Alitalia derailed by union opposition. The French carrier's CEO Jean-Cyril Spinetta said in June the Alitalia dossier was closed as far as it was concerned.

 

Alitalia shares have been suspended since June, after the government, which owns a controlling 49.9 percent stake, began a third sale attempt following the collapse of the French deal. The airline was worth just under USD$1 billion when its shares were suspended.

 

Under the plan being drawn up by adviser Intesa Sanpaolo, Alitalia's troubled units will be split off and put under bankruptcy proceedings, while new Italian investors are sought for the rest of the airline, the government source said.

 

"This way Alitalia will remain in business and the government can present the new company to an Italian consortium, probably as early as next week and then a (foreign) partner will be sought," the government source said.

 

The process will mean the Italian government has to modify the existing bankruptcy law, which was also used to salvage Parmalat. The dairy group collapsed under EUR14 billion euros of debt in 2003, but was relisted on the Milan bourse in 2005.

 

Analysts, however, say that Alitalia's problems could run deeper than those of debt-laden companies like Parmalat.

 

The airline has posted a profit only four times in 15 years, is riddled with inefficiencies and strikes and has steadily lost market share due to stiff competition from low-cost carriers.

 

High fuel prices have also torn a hole through its accounts, and the airline is expected to yet again issue a fresh plea for new funds when it reports results on Friday.

 

(Reuters)

 

[Pieter C. 5]

Italian Businessmen Agree To Invest In Alitalia

 

August 25, 2008

A group of Italian businessmen met Alitalia's sale adviser on Monday and confirmed their willingness to invest in the troubled carrier as part of its latest rescue plan, a source close to the situation said.

 

The investor meeting is the first of several key business and political meetings expected this week to push through a decision to break up the state-controlled airline and seek bankruptcy protection for its troubled units.

 

That is likely to be followed by an injection of funds by potential investors such as Carlo Toto, the head of smaller rival Air One, and wealthy Italian business families the Fossatis, Ligrestis, Rivas and Apontes.

 

Representatives of all four families, Toto, Atlantia CEO Giovanni Castellucci, Equinox fund chief Salvatore Mancuso, and executives from Fingen and private equity fund Clessidra attended the meeting at Intesa Sanpaolo's offices in Milan.

 

Also present were Roberto Colaninno, chief executive at scooter maker Piaggio and now tipped to be executive chairman of a resurgent Alitalia, and Rocco Sabelli, a turnaround expert who worked with Colaninno at Piaggio and is on tap for the post of chief executive at Alitalia.

 

Most of them declined to comment, but businessman Gianluigi Aponte told reporters that the meeting was about Alitalia.

 

"It was the first important meeting of the main investors in Alitalia who listened to a presentation of the (rescue) plan's key points," the source said. "The businessmen confirmed their willingness to be part of the Alitalia team."

 

Bruno Ermolli, an adviser to Prime Minister Silvio Berlusconi, also attended the meeting. Berlusconi has made saving Alitalia one of his key mandates during his first year in office, and has for months been promising a group of Italian investors would materialize to salvage the airline.

 

Newspaper reports have suggested investment by the business leaders could total around EUR1 billion euros.

 

Other business leaders who have been named by Italian newspapers as potential investors in Alitalia, such as the Benetton family and Pirelli Chairman Marco Tronchetti Provera, were not at Monday's meeting.

 

Alitalia, whose board meets on Friday to approve first-half results, is expected to resume the search for a foreign partner after the restructuring.

 

Lufthansa -- which earlier on Monday confirmed its interest in buying a stake in Austrian Airlines -- is considered to be a top contender for buying into a reshaped Alitalia, according to a government source, though it was unclear if the airline has been approached yet on such a deal.

 

(Reuters)

 

[Pieter C. 5]

Air France and Canadian airports: apparently, not a good match !!!

 

Air France Plane Skids Off Runway In Montreal

 

August 27, 2008

An Air France-KLM Boeing 747 aircraft on a flight from Paris skidded off the runway after landing at Montreal's Trudeau Airport on Tuesday but there were no injuries or serious damage, police said.

 

Passengers were taken off the plane by emergency crews after it overshot the runway and became stuck in the grass.

 

Operations at the airport were not seriously affected and planes continued to land and take off.

 

(Reuters)

 

[Pieter C. 5]

Italian Investors Line Up For Alitalia

 

August 27, 2008

Sixteen Italian investors have agreed to invest about EUR1 billion euros (USD$1.47 billion) in Alitalia as part of a plan to revive the ailing airline, a source familiar with the situation said on Tuesday.

 

Alitalia adviser Intesa Sanpaolo will meet on Wednesday with representatives of Air France-KLM -- cited with Lufthansa as potential partner for a new Alitalia -- to present the plan, a second source familiar with the dossier said.

 

The solution for rescuing Alitalia "requires the involvement of an international partner at a certain stage," a third source familiar with the situation said.

 

Intesa's rescue plan is expected to recommend breaking up Alitalia into two and seeking bankruptcy protection for its troubled units and allowing the Italian investors to park their funds in the healthy business left behind.

 

A cabinet meeting scheduled for Thursday is expected to approve an ad hoc change to legislation which would allow the semi-bankruptcy -- a crucial next step for the plan.

 

Air One, Alitalia's only real competitor on the lucrative Milan-Rome route, will be folded into the new company. Its patron Carlo Toto will reinvest part of the EUR300 million he gets from the deal into the new Alitalia - to be named Compagnia Aerea Italiana.

 

The old Alitalia, whose shares were suspended in June, had a market value of below USD$1 billion.

 

The first source said investors including Italian business names such as the Benettons, Ligresti and Roberto Colaninno have signed up to be part of a new company to relaunch Alitalia.

 

Air France-KLM, which has said its plans to buy Alitalia are over after a takeover fell apart this year, had no comment.

 

Piaggio chief executive Roberto Colaninno will become chairman of the new company to save Alitalia, while turnaround specialist Rocco Sabelli will become its CEO, the first source said.

 

The company will be formally incorporated under Italian law within the coming days, the first source said.

 

Other names on the Alitalia list include cruise ship group Aponte, steel group Riva, Gruppo Fratini, funds Equinox and Clessidra, Gruppo Fossati, Marcegaglia, Caltagirone Bellavista, Gruppo Gavio, Davide Maccagnani, Pirelli Chairman Marco Tronchetti Provera and Alitalia's own sale adviser Intesa.

 

The Benetton family plan to channel their funds into Alitalia via toll-road operator Atlantia, which is considering investing EUR100 million in the airline, a source close to the road company said.

 

Atlantia, which is indirectly controlled by the Benettons, plans to hold a board meeting on Wednesday to examine the rescue plan for the airline and decide whether to approve the investment, the source said.

 

This latest rescue plan is the third attempt by Italy's government, which owns a 49.9 percent stake in Alitalia, to settle the stricken carrier's fate.

 

(Reuters)

 

Italy Hopes For New Air France-Alitalia Tie-Up

 

August 27, 2008

Italy's government said on Wednesday it would welcome Air France-KLM buying into a reshaped Alitalia, hoping to woo back the French carrier after helping scupper a previous deal between the two airlines.

 

Italy has managed to find 16 domestic investors to invest in a restructured Alitalia to keep it in the air for now but needs to attract a foreign partner like Air France-KLM or Lufthansa for the longer-term.

 

Alitalia, which has not posted a profit since 1999 and whose shares have been suspended since June, has been on the auction block for 20 months. Italy's two previous attempts to sell it failed.

 

"If Air France-KLM would like to collaborate with the 'new' Alitalia, we would be pleased," Infrastructure Minister Altero Matteoli said at a conference in Rimini, adding an alliance with Lufthansa or another foreign airline would also be welcome.

 

Alitalia adviser Intesa Sanpaolo was expected to meet Air France-KLM representatives on Wednesday to outline the latest plan to rescue Alitalia, a source familiar with the matter said, in what could be the start of a formal approach.

 

Air France-KLM abandoned a takeover of Alitalia this year over union opposition and criticism from Prime Minister Silvio Berlusconi, who was then opposition leader, campaigning for April's election. Air France later said it no longer had any plans to buy Alitalia and on Wednesday it declined to comment.

 

The government has already won a vote of confidence from EU Transport Commissioner Antonio Tajani -- a former Berlusconi aide -- over its plans to salvage Alitalia, which had run the risk of irking the EU if it continued offering state support to the carrier.

 

"The (European) Commission has no option but to view the rescue of Alitalia through private investors in a positive manner," said Tajani. He said it would also boost competition in Europe.

 

The rescue plan is expected to call for a break-up of the airline into two and Matteoli confirmed that would be followed by the bankruptcy of its troubled units.

 

Italy must modify the law to accommodate the move and Tajani said the EU was sent a copy of the plans to do so. Small investors in Alitalia will be protected under the plan, Economy Minister Giulio Tremonti said.

 

Sixteen investors plan to invest EUR1 billion euros into the healthy parts of Alitalia, another source has said, which will then emerge as the "new" airline back in the hunt for a foreign alliance.

 

One of the investors, toll-road operator Atlantia, will plough EUR100 million - EUR150 million into the new Alitalia, chief executive Giovanni Castellucci said. Another company on the list, insurer Fondiaria-SAI, said it would invest some EUR30 million - EUR50 million.

 

Roberto Colaninno, who is expected to become chairman of a new company that groups the new Alitalia investors together, will also present the rescue plan at a Thursday board meeting of his IMMSI holding company.

 

Shares in IMMSI fell 5 percent on the news, before recovering to close down 2.8 percent, while shares of scooter maker Piaggio, majority owned by Colaninno's holding company, fell 3 percent.

 

"Investing in Alitalia is seen as taking a risk," said Michele Baldelli, analyst at Exane BNP Paribas.

 

Also on Wednesday Augusto Fantozzi, a former finance minister, told reporters he was willing to become a special administrator to oversee Alitalia's partial bankruptcy.

 

Alitalia's unions, which have so far adopted a wait-and-see attitude, demanded talks with the government. The Filt-Cgil union said it wanted clarity from the administration over its plans for the airline while the SDL union sought guarantees of protection for workers who will be laid off.

 

Matteoli said employees to be axed under the rescue plan -- estimated to be about 7,000 or about 40 percent of Alitalia's workforce -- could be absorbed by other state-owned companies.

 

(Reuters)

 

Air France Ready To Buy Minority Stake In Alitalia

 

August 28, 2008

Air France-KLM is ready to take a minority stake in a restructured Alitalia, Italian news agency Ansa reported on Thursday, citing the Franco-Dutch carrier.

 

Alitalia's sale adviser has already held an initial meeting with the French carrier, which ditched a takeover of the Italian airline earlier this year over union opposition, to outline its rescue plan, a source familiar with the matter has said.

 

(Reuters)

 

Air France, Lufthansa Equal In Alitalia Talks

 

August 29, 2008

Air France-KLM and Lufthansa are on an equal footing in their talks about a possible partnership with a revived Alitalia, a key investor in the Italian carrier said in an interview published on Friday.

 

"We are dealing with both of them, and they are running at the same speed," Roberto Colaninno, tipped to become chairman of the revamped Alitalia, told La Repubblica newspaper.

 

"One of the two will do, it's indispensable."

 

(Reuters)

 

[Pieter C. 5]

Alitalia Seeks Bankruptcy Protection, Rescuers Ready

 

August 29, 2008

Alitalia sought bankruptcy protection on Friday after nearly two years of looking for a buyer, paving the way for its rescue by a group of Italian investors in a coup for Prime Minister Silvio Berlusconi.

 

The long-awaited move by the national airline after 61 years of flying popes and movie stars during Italy's "Dolce Vita" glory days sets it up for a less glamorous rebirth as a smaller airline focused on domestic and European routes.

 

Alitalia has not posted a profit since 1999 as it faced competition from low-cost carriers, strikes and inefficiencies. But it controls the lucrative Milan-Rome route, and its healthy units will be sold to a group of 16 Italian investors including Intesa Sanpaolo.

 

"Alitalia is a company that has accumulated many errors, many losses, many conflicts," said Intesa Sanpaolo chief executive Corrado Passera, who drew up the rescue plan. "It's in difficulty but has resources within that can be revived, used and relaunched."

 

"The next four weeks will be crucial," Passera said.

 

The airline's debt and its ground service unit will be liquidated, and the state will likely absorb the losses, sparking an outcry from consumer groups and the opposition who say Italians will end up paying for Alitalia's rescue.

 

The government holds a 49.9 percent stake in the airline.

 

Alitalia, which had EUR314 million euros in cash and more than EUR1.17 billion in debt as of July, said in a statement that it had applied for insolvency in a Rome court under a new process for "public service" companies.

 

The airline had been expected to post a record loss in the first half of the year on Friday, but now it will not announce results.

 

Settling Alitalia's fate is a feather in the cap for Berlusconi, who called for a patriotic rescue of the carrier after helping scuttle a deal with Air France-KLM in April.

 

"When we see an Alitalia airline anywhere in the world, each one of us feels close to home," Berlusconi said on Thursday after suspending antitrust laws and overhauling the bankruptcy law to accommodate the rescue.

 

"It's not a question of out-of-fashion patriotism. A flag carrier is indispensable to get tourists from around the world to come to Italy rather than other countries."

 

The new process for public service companies, approved by Berlusconi's cabinet on Thursday, calls for a special administrator with the power to sell some of the company's assets to a single buyer of his choice, instead of conducting a lengthy auction.

 

The government named former finance minister Augusto Fantozzi as commissioner to oversee the bankruptcy process.

 

The administrator does not have to sell to the top bidder but must find a buyer guaranteeing continuity of service.

 

Air France-KLM and Lufthansa are still tipped as front-runners to buy a minority stake in the reshaped airline, which needs a foreign alliance to survive longer term.

 

Ready to buy is the group of 16 Italian businessmen, led by Piaggio CEO Roberto Colaninno under the guise of Compagnia Aerea Italiana (CAI). They plan to invest EUR1 billion into the airline.

 

The head of Air One, Alitalia's only real competitor on the lucrative Milan to Rome route, is among the investors and his company will be folded into the flag carrier, which will focus on short- and medium-haul routes.

 

To sidestep competition problems, the government changed the law so that for at least three years the antitrust authority can only make demands on tariffs and not on the sale of slots.

 

Small investors in Alitalia, whose shares were suspended in June, will be compensated through dormant funds available to the government.

 

About 7,000 people, or 40 percent of the work force, face losing their jobs, but there will be seven-year welfare benefits and options to move on to other public or private companies.

 

Alitalia's strike-prone unions, which have reacted angrily to the rescue plan, are expected to begin talks with the government on Monday aimed at winning their backing.

 

(Reuters)

 

[Pieter C. 5]

Minister Sees Alitalia Job Losses Under 5,000

 

August 31, 2008

Layoffs at Alitalia should be less than 5,000, Italy's employment minister Maurizio Sacconi told la Repubblica newspaper in an interview published on Saturday.

 

Alitalia sought bankruptcy protection on Friday after nearly two years of hunting for a buyer, paving the way for its rescue by a group of Italian investors in a coup for Prime Minister Silvio Berlusconi.

 

The employment minister's estimate of layoffs is lower than reports have suggested for the collapsed airline.

 

"I hope they will be less" than 5,000, Sacconi said. He added that he could not give a figure for the cost of the layoffs because it would depend on the number and age of people leaving as well as other factors.

 

Alitalia filed for bankruptcy protection under a revised law that will facilitate the sale of its slots, planes and other usable assets to Italian investors.

 

The group could also take on about EUR88 million euros of debt, Il Sole 24 Ore newspaper said on Saturday.

 

The group is expected to put in as much as EUR1 billion -- well above Alitalia's last value on the stock market before its shares were suspended from trading.

 

Sacconi, who will kick off talks with Alitalia's unions on Monday, said it was up to adviser Intesa Sanpaolo, administrator Augusto Fantozzi and the Italian investor group to decide on a deadline for the discussions.

 

Private companies will be offered incentives to take on workers leaving Alitalia and Sacconi said public sector jobs would only be available on merit.

 

"Openings in the public sector will be on a competition basis. For the rest, it is up to the private sector," he said.

 

The group of investors, led by turnaround expert Roberto Colaninno, is likely to express formally its interest in Alitalia's assets in the next few days, newspapers reported on Saturday.

 

Il Messaggero said the offer would be valid for 45 days.

 

Air France-KLM, whose own bid to take over the flagship carrier was blocked by unions earlier this year, could invest about EUR200 million, Il Sole 24 Ore newspaper reported on Saturday, giving it a stake of 20 percent.

 

Corriere della Sera newspaper said Air France-KLM could take 20-25 percent.

 

Germany's Lufthansa is also tipped as a possible partner for a revived Alitalia.

 

(Reuters)

 

[Pieter C. 5]

Alitalia Unions Want Agreement On Rescue Plan

 

September 2, 2008

Bankrupt Alitalia's nine major unions on Tuesday said they were willing to negotiate on the latest plan to salvage the airline but needed to be convinced of the plan's merits before discussing job losses.

 

Winning union backing is crucial for the rescue plan led by a group of Italian investors who plan to buy the best parts of the struggling airline which filed for bankruptcy on Friday.

 

The investor group, led by Piaggio CEO Roberto Colaninno, formally submitted a bid for certain Alitalia assets on Monday, sources familiar with the matter have said.

 

"Agreement on the industrial themes is a prerequisite for starting talks over the eventual job losses," the unions said in a statement, a day after Italy's government kicked off talks to win their backing for the plan.

 

Italy's government has warned the unions -- who scuppered a sale to Air France-KLM earlier this year -- that they have no choice but to get on board with the rescue plan, with liquidation of the airline the only other option.

 

(Reuters)

 

[Pieter C. 5]

Italian Group Offers To Buy Parts Of Alitalia

 

September 4, 2008

An Italian investor group leading a government-sponsored rescue of Alitalia submitted an offer to buy a large chunk of the bankrupt airline, bringing it another step closer to a long-awaited restructuring.

 

No details about the offer were disclosed, but Alitalia said on Wednesday the commissioner overseeing its bankruptcy had determined that the bid by Compagnia Aerea Italiana (CAI) appeared to meet requirements under a newly modified law.

 

The offer is part of the government's latest attempt to settle the fate of the carrier, which filed for bankruptcy last week after 20 months on the block.

 

Under the plan, the investors will buy Alitalia's best parts and relaunch it as a smaller airline, while the rest of the carrier is liquidated or sold off. Smaller Italian carrier Air One will also be folded into the reshaped Alitalia.

 

Sources close to the matter had earlier said CAI, a group of 16 Italian business figures led by Piaggio chief executive Roberto Colaninno, submitted the bid on Monday.

 

The Lazio province where Rome is located is also interested in joining the CAI consortium, the region's governor said.

 

Rocco Sabelli, who is expected to become Alitalia's new chief executive, told reporters that CAI will be formally incorporated under Italian law and new officers named on Friday. He spoke after explaining the offer to the airline's bankruptcy commissioner, who is expected to accept the deal.

 

Meanwhile, Colaninno was meeting European Union officials over Alitalia's rescue in Brussels on Wednesday.

 

The European Commission, which has barred further government aid to Alitalia, is seeking to determine whether Italy violates those rules by forcing the state to assume the airline's troubled units and debts, one EU source said in Brussels.

 

The EU must also decide if combining Air One and Alitalia gives the new carrier enough control over the Italian market to call for EU intervention on competition issues, the source said.

 

Italy's government, which owns 49.9 percent of the carrier, changed bankruptcy law and suspended antitrust rules last week to facilitate the rescue.

 

Under the new rules, the bankruptcy commissioner does not have to hold a lengthy auction to sell Alitalia's assets but can enter into private talks to sell them off.

 

(Reuters)

 

Investors Drop Cargo, Maintenance From Alitalia Deal

 

September 4, 2008

The Italian investor group leading a rescue of Alitalia does not plan to buy the bankrupt carrier's cargo and heavy maintenance units, one of the businessmen leading the group told unions on Thursday.

 

The comments are the first to identify which parts of the stricken carrier are likely to be liquidated or sold off as the group of 16 Italian business figures look to relaunch the airline.

 

Meeting unions in a bid to win their backing for the rescue, Alitalia's next CEO Rocco Sabelli said the group had yet to decide on the fate of the call centre, administrative service and informatics units, a union official at the meeting said.

 

Sabelli also outlined plans to cut Alitalia's ageing fleet to 140 planes in 2009, before building it back up to 158 aircraft in 2013 by investing about EUR2 billion euros for 60 new planes.

 

Under the rescue plan, Milan's Linate Airport will focus solely on flights on the lucrative Milan-Rome route. Fourteen new destinations will be added in Italy and 16 added to its intercontinental offerings, the union official said.

 

The relaunched carrier is expected to have a 55 percent share of the domestic market, up from 30 percent at present.

 

Alitalia filed for bankruptcy last week in the first step to set in motion the government-sponsored rescue of the flailing national carrier after a 20 month hunt for a buyer.

 

The carrier's powerful unions have yet to back the deal, and the commissioner overseeing Alitalia's bankruptcy gave them a one-week deadline to get on board with its latest rescue plan.

 

Alitalia's nine unions -- which scuppered a sale of the carrier to Air France-KLM earlier this year -- are up in arms over plans to cut about 7,000 jobs, or about 40 percent of its work force, under the Italian investor-led rescue of the airline.

 

Augusto Fantozzi, the administrator overseeing Alitalia's bankruptcy process, told the unions the two sides must reach a deal by next Thursday, the union official at the meeting said.

 

Earlier on Thursday, the governor of the Lazio province, where Rome is located, offered to join the investor consortium by putting in EUR10 million in an effort to preserve the region's interests in any future decision on Alitalia's fate.

 

Piero Marazzo, the governor, told reporters that Colaninno considered the proposal "interesting" and agreed to further meetings to discuss the investment.

 

(Reuters)

 

Air France Could Become Alitalia Majority Owner

 

September 5, 2008

Air France-KLM could take a stake of 10 to 20 percent in a revitalized group spun out of bankrupt Alitalia and become a majority owner within five years, French daily La Tribune reported.

 

Air France-KLM declined to comment on the report in the Friday issue of the paper.

 

Air France-KLM, which failed to agree on a deal to buy the Italian airline in April, has publicly said it was now ready to take a minority stake but has not provided details.

 

The Franco-Dutch airline would invest in Alitalia alongside a number of Italian industrial groups, La Tribune said, without citing its sources.

 

Alitalia is in talks with unions, politicians and industrial groups to define a rescue plan.

 

"The heads of Intesa could have gone further (than just offering a minority stake) by giving to Air France the option of becoming a majority owner within five years, by 2013," La Tribune said.

 

(Reuters)

 

[Pieter C. 5]

Air France Could Become Alitalia Majority Owner

 

Alitalia Adviser Denies Air France-KLM Report

 

September 5, 2008

Intesa Sanpaolo, which drew up a rescue plan for Alitalia, on Friday denied a French report saying former suitor Air France-KLM could become a majority owner of the Italian airline within five years.

 

Employment Minister Maurizio Sacconi also ruled out a report by French daily La Tribune that Air France-KLM could take a 10 percent to 20 percent stake in a revitalized Alitalia.

 

The report also said Intesa executives could have also offered it the option of becoming a majority owner by 2013.

 

"La Tribune's reconstruction of the possible changes in the shareholder composition of Alitalia and the role played by Intesa Sanpaolo in that regard is completely groundless," a spokesman for Intesa Sanpaolo said.

 

Air France-KLM and Lufthansa are tipped as front-runners to buy a stake in Alitalia after a relaunch led by Italian investors, but Italy's government has stressed that the airline will remain under Italian control and foreign partners can only buy a minority stake.

 

Economy Minister Giulio Tremonti said on Friday he would speak to parliament next week about the role of Air France in the new Alitalia.

 

Sacconi said the airline's cargo, maintenance, call center and IT operations would stay in the hands of Augosto Fantozzi, the administrator overseeing Alitalia's bankruptcy process.

 

One of the businessmen in the investor group Compagnia Aerea Italiana (CAI) said on Thursday the group does not plan to buy the bankrupt carrier's cargo and heavy maintenance units.

 

Alitalia filed for bankruptcy last week to set in motion the government-sponsored rescue of the flailing national carrier after a 20 month hunt for a buyer.

 

The carrier's powerful unions have yet to back the deal and have been given a one week deadline to get on board with the latest rescue plan.

 

CAI on Friday named a three member board with the head of the consortium, Piaggio CEO Roberto Colannino, appointed chairman. The man expected to become Alitalia's next chief executive, Rocco Sabelli, was named to that post.

 

A source close to the matter said CAI would be transformed into a company with a legal entity once the bankruptcy process became clearer.

 

CAI's investors also approved the acquisition of AP Holding, which owns Alitalia's domestic rival Air One.

 

(Reuters)

 

Alitalia Adviser To Meet BA On Rescue Plan

 

September 6, 2008

Alitalia's adviser will soon present details of the airline's rescue plan to British Airways, considered by Italy as a possible foreign partner for the bankrupt airline, an executive told a newspaper.

 

"Soon we will present the plan to British Airways as well," an executive at Intesa Sanpaolo, the Italian bank behind the plan, said in an interview published in business daily Il Sole 24 Ore on Saturday.

 

Gaetano Micciche, who heads the bank's corporate and investment banking division, has already presented the plan to Air France-KLM and Lufthansa, and he said he had got a positive response from both airlines.

 

An industry source last month said British Airways would not consider a partnership with Alitalia.

 

(Reuters)

 

[Pieter C. 5]

Interesting......

 

Air France, Veolia Plan High-Speed Rail Venture

 

September 8, 2008

Air France-KLM said on Monday it plans to move into high-speed passenger rail transport in a venture with French transport, waste and water firm Veolia.

 

The Air France unit of the airline group said that it and Veolia were studying such a venture for when European rail passenger traffic is liberalized on January 1, 2010.

 

However the company said in a statement it could not confirm a newspaper report that the deal could be signed on September 15.

 

Air France-KLM said at the beginning of July that it was in discussions with Veolia about a partnership to create a new high speed rail player in Europe.

 

High speed rail travel is currently mainly in the hands of state-owned rail companies such as SNCF or Deutsche Bahn, or joint ventures between these operators such as Eurostar and Thalys. Private group NTV plans high-speed travel in Italy.

 

(Reuters)

 

[Pieter C. 5]

Union Backs Alitalia Plan, But Deadlock Looms

 

September 9, 2008

A powerful Italian union grudgingly backed Alitalia's rescue plan on Tuesday in the first sign of progress in crucial talks, but other unions kept up their threat to stall the deal.

 

Winning union backing is a key condition for implementing Alitalia's government-sponsored rescue, which involves an Italian investor group buying the carrier's profitable assets in a bid to relaunch it as a smaller, leaner airline.

 

The head of the Cisl union, one of Alitalia's three biggest, said he would back the plan but wanted guarantees, including union representation on the new airline's board.

 

"The priority for Cisl is to avoid Alitalia being shut down and saving 20,000 workers," Raffaele Bonanni told Corriere della Sera in an interview published on Tuesday.

 

"To guarantee this, I'll get on board with the deal, but I expect that the government and investors involved in the operation agree to requests from a reasonable union like ours."

 

He said he wanted the Italian investors to be bound by a contract preventing them from selling their stake for five years, and clauses inserted to prevent a takeover by a potential foreign partner.

 

Jean-Cyril Spinetta, chief executive of Air France-KLM, which is considered a front-runner for such an alliance, on Tuesday denied there was a pact to take control of Alitalia. But he reiterated that his airline was ready to take a minority stake in the Italian carrier in the medium term.

 

Bonanni's comments came following the suspension of talks between the unions and the investors on Monday, after unions representing pilots and flight attendants condemned the plan as unacceptable.

 

The unions, who are up in arms over plans to cut more than 3,000 jobs and trim salaries and benefits, have a Thursday deadline to reach a deal with the investor group.

 

"It's a plan that contains a drastic reduction in salaries, of a range that absolutely cannot be proposed and cannot in any way represent a base for a serious discussion," Massimo Muccioli, the head of the Anpav pilots' union, told Ansa.

 

Another powerful Alitalia union, Cgil, could get on board with the deal if the Italian consortium agreed to increase the number of flights and planes foreseen under the plan, the union's leader, Guglielmo Epifani, said.

 

A Cigl official told reporters the plan intended to cut Alitalia's staff costs by 50 percent.

 

Labor Minister Maurizio Sacconi, who plans to hold informal talks to prevent the deal from stalling, on Tuesday said the government was ready to mediate in the talks and remained optimistic that a deal would be reached by Thursday.

 

Alitalia's unions are notorious for staging strikes and felled a deal with Air France-KLM earlier this year. They have often succeeded in dictating strategy at the airline, thanks to their political clout and the desire of successive administrations to prevent the national airline from collapsing.

 

Under the rescue plan, the investor group CAI plans to buy Alitalia's flight operations while the rest -- such as its ground service operations and cargo unit -- are liquidated or sold off.

 

Augusto Fantozzi, who is overseeing Alitalia's bankruptcy, has named Rothschild as an adviser, a financial source said.

 

Away from the union talks, Milan airport operator SEA, which is seeking damages from Alitalia, announced it had joined forces with its counterpart in Rome, ADR, to explore a possible joint strategy to safeguard both companies' debts with the airline.

 

SEA filed a lawsuit seeking EUR1.2 billion euros from Alitalia after it announced it would reduce its presence in the northern city and favour the capital, but SEA has said it could scrap the suit depending on what the rescue plan boded for Milan Malpensa Airport.

 

(Reuters)

 

[Pieter C. 5]

Alitalia Commissioner Warns Unions Of Liquidation

 

September 10, 2008

Alitalia's bankruptcy commissioner warned unions on Wednesday he would be forced to terminate their work contracts and liquidate the carrier unless they backed its latest rescue plan, the airline said.

 

Italy has given the bankrupt airline's powerful unions a Thursday deadline to back the plan, under which an Italian investor group would relaunch Alitalia as a smaller airline, cutting thousands of jobs and reducing salaries.

 

"The commissioner has told union representatives that he will begin the termination of all group contracts and agreements still in force," the airline said in a statement.

 

Union leaders -- who are split over whether to approve the rescue plan -- have been called to the Employment Ministry at 10 am (0800 GMT) on Thursday for the final phase of talks, a union source said.

 

There has been speculation that the talks could run past September 11 and into the weekend, despite local media reports suggesting that the Thursday deadline was firm.

 

One powerful Italian union has backed the plan but the airline's pilots and flight assistants have condemned it.

 

"We have our backs against the wall and we all know it," said Giuseppe Caronia, secretary-general of the Uil union, according to Ansa news agency.

 

"But putting your adversary in a corner can spur dangerous reactions, the reaction of one in the corner can be irrational."

 

Alitalia's unions are notorious for staging strikes, and prevented a deal with Air France-KLM earlier this year. They have often succeeded in directing strategy at the airline, thanks to their political clout and the desire of successive governments to prevent the national airline from collapsing.

 

Under the rescue plan, a group of Italian investors aims to buy Alitalia's flight operations, while the rest of the group -- including its ground-service operations and cargo unit -- are to be liquidated or sold off.

 

The unions will push for Alitalia's maintenance activities to be hived off to Finmeccanica, a publicly listed defence and aerospace company in which the government holds a controlling stake, a union source said.

 

Finmeccanica is not part of the group of Italian investors and has not expressed an interest in investing in the airline.

 

Labour Minister Maurizio Sacconi said on Tuesday the government was ready to mediate in talks with Alitalia unions and remained optimistic that a deal would be reached by Thursday, but some unions questioned that optimism.

 

Economy Minister Giulio Tremonti told parliament on Wednesday that negotiations were "characterized by a high level of complexity".

 

(Reuters)

 

 

Air France-KLM Undecided On Alitalia Stake Size

 

September 10, 2008

Air France-KLM will wait to see Alitalia's new business plan before deciding what kind of minority stake it might take, CEO Jean-Cyril Spinetta said, adding any investment must be profitable.

 

"We'll see. But before talking about numbers, we'll wait to see the business plan," Spinetta said in an interview with Il Giornale newspaper, when asked about rumours it might take a 15 percent stake.

 

Spinetta said Air France-KLM was ready to invest in a restructured Alitalia, but only if "it has the certainty that the investment will be profitable in a reasonable period of time".

 

Air France-KLM abandoned a takeover of Alitalia earlier this year amid union opposition and criticism on the campaign trail from Silvio Berlusconi, who became prime minister in the subsequent election.

 

Since taking office in May, billionaire media mogul Berlusconi has rallied a group of Italian investors to buy the bankrupt Italian flag carrier's profitable assets.

 

The government-sponsored rescue effort, which still needs union approval, aims to relaunch Alitalia as a smaller, leaner airline.

 

(Reuters)

 

[Pieter C. 5]

The AZ-saga continues....

 

Alitalia Unions In Crunch Talks, Flights Cancelled

 

September 11, 2008

An Italian investor group leading a bailout of Alitalia held make-or-break talks with the carrier's unions on Thursday, as protests by airline workers disrupted traffic and led to the cancellation of 50 flights.

 

The two sides initially had a Thursday deadline to reach a deal and Italy's employment minister said it could be extended until early Friday at most. The unions have been told their contracts will be terminated and the airline shut down if talks fail.

 

"It's tonight or never again," employment minister Maurizio Sacconi told reporters. "Tomorrow when the offices open, Alitalia's bankruptcy commissioner Augusto Fantozzi must move quickly on the basis of a deal or a breakdown."

 

The unions, who thwarted Alitalia's sale to Air France-KLM this year, are split over whether to back the plan that foresees the investor consortium, CAI, taking over the bankrupt airline's best assets to relaunch it.

 

One major union has backed the plan, but the airline's pilots and flight attendants have rejected efforts to cut more than 3,000 jobs, trim salaries and reduce the fleet and network.

 

The talks, which began on Thursday morning and were expected to continue late into the night, appeared to have made little progress before an afternoon break.

 

"The risk that the situation goes downhill fast is high," said Stefano de Carlo, an official from the ANPAC pilots union.

 

"The responses (we got) on the plan are not satisfactory, because they don't make changes to the network or the fleet."

 

Another union official, Giuseppe Caronia of the Uilt union, said his group was unwilling to accept any salary cuts.

 

About 50 Alitalia flights were cancelled at Rome's Fiumicino Airport due to an impromptu union meeting, said a person briefed on the cancellations, and Alitalia workers blocked traffic outside the airport.

 

About 200 Alitalia employees including pilots in uniform also protested outside the employment ministry where the talks were being held. Many held banners or had nooses around their neck to show their anger at plans to cut jobs and salaries.

 

"This is the Italian consortium for employees," said one sign attached to a noose worn by a worker.

 

Under the government-sponsored rescue plan, CAI will take over Alitalia's flight operations while the rest -- such as its troubled ground services and cargo units -- are to be sold off or liquidated.

 

In a concession to unions, CAI executive Rocco Sabelli said the group was willing to take a stake in the company managing Alitalia's heavy maintenance and cargo units, a union source present at the meeting said.

 

Alitalia filed for bankruptcy last month, felled by stiff competition from low-cost carriers, high fuel prices, inefficiencies and political interference.

 

Shares of the state-controlled airline have been suspended since June, when it was worth EUR617 million euros (USD$859.3 million) on the market.

 

(Reuters)

 

 

Berlusconi Shows Off Italian Rescue Of Alitalia

 

September 11, 2008

Italian Prime Minister Silvio Berlusconi on Thursday unveiled his plan to rescue Alitalia, fulfilling a key election pledge and promised that control of the airline would stay firmly in Italian hands.

 

Former suitor Air France-KLM said it was interested in a minority stake when the company returns to profit.

 

"Our actions allow us to create a new Alitalia, a more efficient, high-tech airline, able to support itself," Berlusconi said, after his cabinet changed laws in order to dump Alitalia's debt and remove antitrust hurdles.

 

He overcame potential opposition from key allies the Northern League by offering Milan's Malpensa Airport the chance to develop with international carriers.

 

Milan is the Northern League's home base.

 

"The slots left by Alitalia can become Malpensa's birthright," Northern League minister Roberto Calderoli said.

 

New draft legislation approved by the cabinet on Thursday will allow Alitalia to be split, with its troubled units put under bankruptcy protection while 16 Italian investors invest USD$1.5 billion into the rest to create as a smaller, leaner airline.

 

Alitalia, which has steadily lost market share, passengers and money due to stiff competition from low-cost carriers, inefficiency and strikes, has not posted a profit since 1999.

 

It has only managed to keep flying thanks to a EUR300 million euro government cash injection that the European Commission thinks could be illegal state aid.

 

But European Transport Commissioner and former Berlusconi spokesman Antonio Tajani has already said Brussels has no option but to view the rescue positively.

 

Berlusconi's predecessor, Romano Prodi, tried to unload the airline for over a year, but his attempt to sell it to Air France-KLM fell apart after criticism by the then opposition and union resistance.

 

The government blocked the powers of the antitrust authorities so Alitalia can regain its dominance of the lucrative Milan to Rome route when it folds in smaller domestic airline Air One under the plan.

 

Low-cost carrier easyJet said the plan would leave consumers with fewer options and high fares on domestic routes.

 

Small investors in Alitalia, whose shares have been suspended since June, look set to be compensated through dormant funds available to the government.

 

The Italian opposition immediately cried foul over the plan, saying the state and consumers would end up financing Alitalia's rescue.

 

The new investors include Italian business names such as the Benettons and Roberto Colaninno, whose holding company, IMMSI, on Thursday approved investing up to EUR150 million in Alitalia.

 

Alitalia sale adviser Intesa Sanpaolo also said it could invest EUR100 million in the airline.

 

After the restructuring, the carrier is expected to focus on short- and medium-haul routes and will operate with a much reduced fleet and about 40 percent fewer employees.

 

Berlusconi said layoffs would be much lower than would have been the case under the Air France-KLM takeover plan, but unions still need to be convinced. Italy's employment minister will meet them on Monday. He said Alitalia employees would have the option of moving to other companies.

 

(Reuters)

 

 

Alitalia Buyout Suspended As Union Talks Stall

 

September 12, 2008

Italy's government scrambled to salvage a rescue deal for Alitalia on Friday after would-be buyers suspended a takeover in the face of union opposition, and even the pope said he was praying for the ailing airline.

 

The CAI group of Italian businesses that had agreed in principle to buy the profitable parts of Alitalia suspended due diligence, an essential part of a takeover that involves inspecting the target company's books.

 

The airline, 49.9 percent owned by the Italian government, said the buyers had not formally withdrawn their offer after late-night talks with unions resulted in deadlock, but CAI said it saw no way back to the negotiating table.

 

The government gave unions until the end of Friday to come up with a common position and said it was committed to avoiding "irreversible acts" by CAI and the bankruptcy commissioner in charge of Alitalia.

 

But the deadlock persisted even after evening talks among union leaders in Rome. Unions renewed their opposition to CAI's plan and sent a letter requesting an urgent meeting with the bankruptcy commissioner, said Mauro Rossi at CGIL, Italy's biggest union.

 

"Our counter-offer is the (same) one we made in past days to CAI and the government: This industrial plan is no good," Rossi said, adding unions still wanted to negotiate.

 

The government warned earlier there were no other options to the CAI plan and it was unclear whether more time would be given for negotiations.

 

"What's certain is that this is a failed company and therefore there isn't any alternative," Industry Minister Claudio Scajola said. "Either a deal is reached or all of the workers are laid off."

 

Alitalia, constantly dogged by union disputes and financial woes, has not posted a profit since 1999 and had nearly EUR1.2 billion euros (USD$1.68 billion) in debt as of July.

 

Talks between CAI and unions broke down mainly over new job contracts proposed by the investors, which unions say would cut salaries at the airline by 40 to 50 percent.

 

For the more than 3,000 employees due to be laid off under CAI's rescue plan, the government has promised welfare benefits for seven years -- amounting to 80 percent of their base salary -- and the options of jobs at other public or private firms.

 

One union official said Alitalia had said it would send out lay-off letters to staff on Friday. But another union official said the government ruled out starting the lay-off process "for the time being."

 

The latest in a long line of rescue attempts for Alitalia comes as airlines across Europe have been forced to merge or ponder new alliances to try to weather an economic downturn that follows hard on the heels of a massive increase in fuel bills.

 

The fate of Alitalia has huge political significance for Berlusconi, who swept back into power at an April election after almost two years in opposition, promising to use his business connections to keep the flag carrier Italian.

 

"The government has a duty to continue to try and put back together the pieces to arrive at an agreement to save the national airline," said Transport Minister Altero Matteoli.

 

CAI is made up of prominent businesses that Berlusconi persuaded to come forward after a sale of the government's stake to Air France-KLM, agreed last year, collapsed in April under pressure from unions.

 

Berlusconi's government changed bankruptcy and antitrust rules to facilitate the rescue plan, which envisages CAI taking over Alitalia's flight operations, while the rest -- such as its ground services and cargo units -- is to be sold or liquidated.

 

The airline's shares have been suspended since June, when it had a market capitalization of EUR617 million (USD$864.6 million). It has managed to keep flying thanks to a EUR300 million government loan that the European Commission has said it thinks could be illegal state aid.

 

The pilots' union said the latest rescue plan involved more lay-offs than those envisaged by Air France-KLM, which had negotiated a deal with the approval of the former.

 

Bankruptcy commissioner Augusto Fantozzi met Pope Benedict at Rome Airport just before the pontiff boarded an Alitalia flight to France for a pilgrimage to Lourdes, and asked him to pray for the airline.

 

Benedict replied: "I have been praying for you for some time."

 

(Reuters)

 

[Pieter C. 5]

Italy Seeks Last-Minute Deal To Save Alitalia

 

September 14, 2008

The Italian government scrambled for a deal with airline workers on Sunday in a bid to save Alitalia from imminent collapse.

 

With Alitalia's operating license in jeopardy and the likelihood that it will have to ground flights from Monday due to a lack of fuel, the airline's unions faced a stark choice between a rescue plan with job and salary cuts and pushing the carrier toward liquidation.

 

Labor Minister Maurizio Sacconi called the unions to crunch talks at 6.30 pm (1630 GMT). "I think there are reasons to be optimistic," he told reporters in a break between meetings.

 

Unions have so far rejected an Italian consortium's offer to buy profitable parts of the airline and relaunch Alitalia as a slimmed down regional carrier. But with liquidation the only obvious alternative, they appealed for a compromise.

 

"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."

 

At Rome's Fiumicino Airport, several hundred Alitalia employees staged a 15 minute protest, temporarily blocking passengers' way to check-in desks of various airlines.

 

Once a symbol of Italy's post-war boom, Alitalia has for years suffered from political interference, union disputes, financial woes and most recently from high fuel costs -- which are weighing on airlines around the world.

 

Britain's third largest package travel operator, XL Leisure Group, grounded all flights on Friday after going into administration. Discount transatlantic carrier Zoom Airlines began bankruptcy proceedings last month.

 

Italy's civil aviation authority said on Saturday that Alitalia's operating license was at risk after the airline confirmed media reports that it was having trouble buying jet fuel from wary suppliers.

 

Alitalia is operating under a bankruptcy commissioner who has said the only alternative to the rescue plan is liquidation, a procedure he has held back from starting while talks go on.

 

Letting Alitalia collapse would be a huge political blow for Prime Minister Silvio Berlusconi who promised voters he would use his business contacts to find an Italian buyer for the airline.

 

With only a few hours remaining to agree a rescue plan, stakes were high for all concerned. La Stampa daily said there was a "firm belief that a collapse would be a serious blow not only for the government but also for unions, workers, employers and, in fact, the entire country".

 

The investor group CAI has said publicly it would not give any more concessions but La Repubblica said CEO Roberto Colaninno had improved his offer on salaries, reducing pay cuts to 20 percent, from around 25 percent.

 

In April, Alitalia's unions sank a deal agreed under the previous government to sell the airline to Air France-KLM, a deal that Berlusconi, then in opposition, said he would block if he came into power.

 

The state holds a 49.9 percent stake in the airline and its publicly traded shares have been suspended since June. Alitalia has not been profitable since 1999 and had nearly EUR1.2 billion euros (USD$1.68 billion) of debt as of July.

 

(Reuters)

 

NO MORNING AZ-FLIGHTS EX AMS ON 16SEP08, ONLY A FEW AFTERNOON ONES

 

[Pieter C. 5]

Big Alitalia Unions Strike Initial Deal

 

September 15, 2008

Alitalia's biggest unions clinched a framework agreement on Monday meant to save Italy's largest airline from liquidation, but more talks remained and flights risked being grounded for a lack of cash to pay for fuel.

 

Italy's four main union confederations -- CGIL, CISL, UIL and UGL -- agreed during overnight talks with the government and a business consortium offering to buy the carrier to the rough outline of a rescue plan that includes job cuts.

 

"It's a first, important step," said Raffaele Bonanni of the CISL union.

 

But it was not clear if Alitalia's other five unions would agree to the deal being negotiated by their peers. Talks on tricky issues such as salary cuts were set to resume at 11 am (0900 GMT), with no guarantee of success.

 

Italy's civil aviation authority said over the weekend Alitalia's operating license was at risk after the airline confirmed it was having trouble buying jet fuel from wary suppliers.

 

The chief executive of ENI, Paolo Scaroni, said the Italian oil company would not provide Alitalia fuel without cash upfront.

 

"Not even if Berlusconi or the Pope ask me to," Scaroni told La Repubblica daily. "(ENI) cannot supply fuel to airlines if they cannot pay cash. There is no moral suasion -- international agreements are clear."

 

Once a symbol of Italy's post-war boom, Alitalia has for years suffered from political interference, union disputes, financial woes and most recently from high fuel costs which are weighing on airlines around the world.

 

The airline, which is operating under a bankruptcy commissioner, has not been in profit since 1999 and had nearly EUR1.2 billion euros (USD$1.7 billion) in debt as of July.

 

An Alitalia collapse would be a huge political blow for Prime Minister Silvio Berlusconi who promised voters he would use his business contacts to find it an Italian buyer.

 

Britain's third largest package travel operator, XL Leisure Group, grounded all flights on Friday after going into administration. Discount transatlantic carrier Zoom Airlines began bankruptcy proceedings last month.

 

The state holds a 49.9 percent stake in the airline and its publicly trade shares have been suspended since June.

 

(Reuters)

 

'Cursed' Alitalia, Pope's Airline, On The Ropes

 

September 15, 2008

Alitalia still faces the risk of collapse as the Italian government sought a last-minute agreement between a consortium of investors and unions.

 

Here are some key facts about Italy's flag carrier:

 

-- Alitalia was created in 1947; 50 years later its annual traffic was 24.5 million passengers with a fleet of 173 aircraft. "Ali" is Italian for wings.

 

-- It now has weekly flights to 25 Italian airports, 45 in Europe, North Africa and the Middle East and 14 in the rest of the world. Its work force numbers some 19,000, including workers on temporary contracts.

 

-- The Italian state has a 49.9 percent stake in Alitalia; its publicly traded shares were suspended in June.

 

-- The airline loses more than EUR million euros (USD$2.8 million) a day, according to latest available data -- a three-month pre-tax loss of EUR215 million. Its net debt stood at almost EUR1.2 billion as of July.

 

-- The government gave Alitalia an emergency loan of EUR300 million earlier this year to stop it going bust. The European Commission is investigating to see if that is illegal state aid under rules that ban governments from propping up their airlines in what is, in theory, a competitive environment.

 

-- Alitalia last reported a profit in 2002, only because Dutch airline KLM paid EUR200 million to break an alliance.

 

-- The airline sought bankruptcy protection on August 29 and bankruptcy commissioner Augusto Fantozzi is in charge of overseeing the latest rescue plan or winding the company up.

 

-- When Pope Paul VI became the first pope to fly in a plane, in 1964, he flew Alitalia. Pope Benedict left Rome on a chartered Alitalia flight for France on Friday and said he was praying for the airline.

 

-- Former chairman Maurizio Prato called the company "cursed", saying only an exorcist could save it after negotiations with Air France- KLM collapsed in April.

 

(Reuters)

 

 

[Pieter C. 5]

Italy Eyes Alitalia Deals, Not Merger

 

September 16, 2008

Italian Prime Minister Silvio Berlusconi told French President Nicolas Sarkozy he wants tie-ups between Alitalia, Air France and Lufthansa but was not talking of a merger, a French source said.

 

At a meeting with Sarkozy in Paris on Tuesday, Berlusconi said he was in favor of business agreements between the three airlines, an official in Sarkozy's office said, adding that such deals could include codeshare agreements or jointly managing airport terminals, but not a takeover.

 

"Silvio Berlusconi indicated that what he wanted, when the time comes, was for there to be commercial alliances with Air France, with Lufthansa, and that things were open," the official said on condition of anonymity.

 

The Italian Prime Minister said on Monday Lufthansa would be the best international partner for the new Alitalia once a deal was reached with Italian unions.

 

Last year, the previous Italian government agreed to sell the state's 49.9 percent stake to Air France-KLM, but the Franco-Dutch carrier walked away due to opposition by unions. Berlusconi also said he would block the deal if he was returned to power.

 

Now operating under a bankruptcy commissioner, Alitalia risks becoming the first major European flag carrier to go bust since Swissair collapsed in 2001. Belgium's Sabena also filed for bankruptcy in 2001.

 

Before looking at tie-ups with airlines such as Air France, however, Berlusconi was concentrating on finding a lasting solution for Alitalia, the French official said.

 

"The point he is focused on for the moment is finding a solution for the company's survival," he said.

 

(Reuters)

 

 

Alitalia Scraps 40 Flights Over Strike

 

September 17, 2008

Alitalia will cancel 40 flights on Wednesday because of a strike by a small union, but not because of problems buying fuel for the near-bankrupt airline, an Alitalia spokesman said.

 

Alitalia's bankruptcy commissioner has warned that Italy's largest airline is running out of cash to buy fuel and that flights could be grounded if unions do not agree quickly to a buyout offer by a group of investors.

 

(Reuters)

 

[Pieter C. 5]

Buyers Give Alitalia New Ultimatum, Unions Split

 

September 17, 2008

An investor group offering to rescue state-controlled airline Alitalia from bankruptcy has threatened to withdraw on Thursday if its proposal does not get union approval, a union source said.

 

After days of tense negotiations with workers, the head of CAI, a group of Italian businessmen, told unions he would propose pulling the offer at a shareholders' meeting if they do not come on board by then, the source said.

 

Alitalia, a national symbol in Italy for more than six decades, risks being liquidated after years of political interference, union disputes, mismanagement and, more recently, high fuel costs.

 

The carrier, which had EUR1.17 billion euros (USD$1.66 billion) in debt at the end of July, is losing more than EUR2 million a day.

 

After two previous attempts to sell the state's 49.9 percent stake failed, the new government led by Prime Minister Silvio Berlusconi persuaded a group of investors to present a rescue plan.

 

But only three of Alitalia's notoriously feisty nine unions said on Wednesday they were ready to accept CAI's offer.

 

The biggest, CGIL, said it was not optimistic that a deal could be reached, while one of the main pilots' groups said it remained opposed in the absence of changes to the plan, which involves job cuts, lower pay and reduced benefits.

 

Employment Minister Maurizio Sacconi said the alternative to a deal was Alitalia's failure, and that the greenlight from three unions represented "an important consensus basis."

 

A source close to the talks said "approval by a significant number of unions would be enough" for CAI to go ahead.

 

Some 3,250 of Alitalia's 20,000 workers would be laid off under the bailout plan, which would see CAI buy only the profitable parts of the airline before relaunching it as a slimmed-down regional carrier.

 

Roberto Colaninno, CAI's chairman, said on Wednesday he had no further concessions to make and "there is nothing left to discuss."

 

A close aide to Berlusconi, Gianni Letta, told unions at a meeting on Wednesday they had until 3.50 pm (1350 GMT) on Thursday to give their final position.

 

Alitalia's government-appointed special administrator has said the airline is running out of cash for fuel and said all planes could be grounded if unions did not quickly back the buyout offer.

 

Even as Alitalia teetered on the brink of collapse, a strike by a small union cancelled 50 flights on Wednesday. A spokesman said the company was still able to buy fuel.

 

Previous deadlines set by CAI and the government have come and gone but Sacconi insisted the very last moment for unions to sign on was Thursday.

 

An Alitalia collapse would be a huge political blow for Berlusconi, a business mogul who promised voters who elected him in April that he would use his contacts to find an Italian buyer.

 

Berlusconi has offered special payouts to the workers who would lose their jobs under the rescue plan, but warned that offer would be pulled if the airline collapsed.

 

Underscoring the problems in the sector, Greece said on Wednesday it would shut down its ailing state carrier Olympic Airlines and relaunch it under a new structure.

 

(Reuters)

 

 

Alitalia 'Hanging By A Thread' On Decision Day

 

September 18, 2008

Italy's employment minister said on Thursday that the liquidation of Alitalia was a "very real risk" later in the day when an investor group offering to rescue the state-controlled airline was due to make its final decision.

 

"I really think the future of Alitalia is hanging by a thread," Minister Maurizio Sacconi said on a morning talk show.

 

With Alitalia in special administration and running out of cash to buy fuel, the risk that the airline that was once the flyer of popes and divas had only days or even hours of life left seemed more palpable than ever.

 

"There is no room for negotiations left... liquidation is a very real risk," a pessimistic-sounding Sacconi said.

 

CAI, the group of Italian businessmen headed by chairman Roberto Colaninno, has threatened to withdraw if its proposal does not get union approval.

 

Colaninno has said he had no further concessions to make and nothing left to discuss.

 

Unions have been told they have until 3.50 pm (13:50 pm GMT) on Thursday to give their final position. The CAI board meeting starts at 4 pm.

 

After days of tense negotiations with workers, Colaninno told unions he would propose withdrawing the offer at the meeting if they do not come on board by then.

 

Alitalia, a national symbol for more than six decades, has been the victim of political interference, union disputes, mismanagement and, more recently, high fuel costs.

 

Asked if the government had a contingency plan to deal with the domestic transport chaos that a collapse of Alitalia would entail, Sacconi said no.

 

"This is a very traumatic situation that we said we have feared many times," he said.

 

The carrier, which had EUR1.17 billion euros (USD$1.66 billion) in debt at the end of July, is losing more than EUR2 million a day. It filed for bankruptcy protection at the end of August.

 

Only three of Alitalia's notoriously feisty nine unions have said they are ready to accept CAI's offer.

 

Some 3,250 of Alitalia's 20,000 workers would be laid off under the bailout plan, which would see CAI buy only the profitable parts of the airline before relaunching it as a slimmed-down regional carrier.

 

The biggest, CGIL, said it was not optimistic that a deal could be reached, while one of the main pilots' groups said it remained opposed in the absence of changes to the plan, which involves job cuts, lower pay and reduced benefits.

 

After two attempts to sell the state's 49.9 percent stake failed, the new government of Prime Minister Silvio Berlusconi persuaded a group of investors to present a rescue plan.

 

An Alitalia collapse would be a huge political blow for Berlusconi, a media mogul who promised in April's election to use his business contacts to find an Italian buyer.

 

Berlusconi has offered special payouts to the workers who would lose their jobs under the rescue plan, but warned that offer would be withdrawn if the airline collapsed.

 

(Reuters)

 

[Pieter C. 5]

Another one bites the dust ?

 

Alitalia Faces Liquidation As Buyers Pull Out

 

September 18, 2008

Alitalia faced the prospect of liquidation after a business group that had mounted a rescue bid withdrew its offer on Thursday, citing union opposition.

 

All members of the CAI consortium voted to abandon the offer -- a blow to Prime Minister Silvio Berlusconi, who had used his business connections and political sway to persuade investors to bid for the 20,000-employee flag carrier and keep it Italian.

 

"The situation is dramatic and we could be facing the abyss," Berlusconi told reporters, adding that left-wing opposition and unions were to blame. Asked whether this meant Alitalia's failure, Berlusconi said: "We'll see."

 

The breakdown came a day after Greece said it would close Olympic Airlines and relaunch it as a private-sector company. Airlines are struggling to cope with high fuel costs and declining revenues as the credit crunch crimps spending.

 

Alitalia's government-appointed special administrator Augusto Fantozzi has repeatedly warned that if CAI's bid fell apart, he would start liquidation proceedings.

 

However, Fantozzi appeared more cautious on Thursday, saying he would begin the difficult task of seeking new funds for Alitalia and "do everything possible to keep it alive."

 

A EUR300 million euro bridge loan granted to the company by the previous government is being questioned by the European Commission as possibly illegitimate state aid.

 

CAI said it had pulled its offer after six of Alitalia's nine unions refused to sign up for the plan, which would have seen the group snap up only the profitable parts of the carrier.

 

It said the airline's troubled financial situation -- Alitalia is losing EUR2 million (USD$2.9 million) a day -- meant negotiations could not drag on any longer.

 

Employment Minister Maurizio Sacconi said the withdrawal "paves the way for the failure of all the companies in the Alitalia group."

 

As the news broke, a leader of one of the three biggest unions said CAI's withdrawal would be "a social catastrophe."

 

"The company is dead and some of my colleagues want to be its undertakers," said Luigi Angeletti, head of the UIL union, referring to other unions' refusal to agree to the deal.

 

However, the news was welcomed with applause by many Alitalia staffers gathered at Rome's Fiumicino Airport and outside the CAI's meeting in Milan.

 

"The offer didn't make any sense," said an Alitalia steward in Rome who asked not to be named. "Why would anyone accept having their pay halved and ridiculous hours and conditions? People would rather go and find jobs as waiters."

 

Pilots' union ANPAC, which had staunchly opposed CAI's plan to slash thousands of jobs and cut salaries, said more talks could have led to a compromise.

 

"It's a shame. In my opinion the conditions were there for a deal. Now they (CAI) are off and we're still here with our extremely serious problems," Fabio Berti told reporters.

 

Alitalia, a national symbol for more than 60 years, has long suffered from political interference and union unrest and, more recently, from high fuel costs and an economic downturn stinging the travel sector worldwide.

 

Even Pope Benedict, who like his predecessors flies Alitalia on trips abroad, said he was praying for the airline last week.

 

CAI's rescue plan was the third attempt in less than two years to sell the state's 49.9 percent stake in the airline, which last posted a profit in 1999.

 

Under the former government last year, Air France-KLM agreed to buy Alitalia. But that bid was blocked by unions and opposed by Berlusconi, then leader of the opposition. He ran a successful election campaign in April vowing to keep Alitalia alive and Italian.

 

Sources close to Fantozzi said he was in contact with Lufthansa, Air France-KLM and British Airways -- which he said had all expressed interest in a minority stake in Alitalia if CAI's bid had succeeded.

 

(Reuters)

 

Alitalia's Failed Sale Process - CHRONOLOGY

 

September 18, 2008

A group of Italian businessmen who had offered to buy Alitalia withdrew its bid on Thursday in the face of union hostility, raising the prospect of the airline's failure.

 

A timeline of Alitalia's faltering sale process follows:

 

INITIAL AUCTION

 

The previous government announced it was putting its Alitalia stake up for sale in late December 2006.

 

Rome owns 49.9 percent of the carrier and sought bids for at least 39.9 percent of the company, which would automatically trigger a full bid under Italian takeover law.

 

There were 11 bidders initially, but the auction collapsed in July 2007 as the number shrank gradually, until the only remaining bidder -- smaller rival Air One -- also pulled out.

 

SECOND TRY

 

Alitalia then drew up its own list of six potential partners to pursue, and Franco-Dutch carrier Air France-KLM and Air One put in non-binding bids to buy the carrier.

 

Italy's then government overlooked massive lobbying by unions and regional politicians to pick Air France-KLM for exclusive talks.

 

The two airlines agreed on a takeover that valued Alitalia shares at just 10 euro cents, an 81 percent discount to the price they were trading at the time.

 

Criticism from Silvio Berlusconi, who was campaigning to become prime minister at the time, and a lawsuit by Milan's airport operator put the deal at risk, and it ultimately fell apart over union opposition.

 

THIRD TIME UNLUCKY?

 

After clinching power in April, Berlusconi began a third attempt to secure Alitalia's future, promising a group of Italian investors would buy the carrier. Normal disclosure requirements on the sale's progress were waived, and Alitalia shares were suspended indefinitely in June.

 

The government asked bank Intesa Sanpaolo to draw up a rescue plan and 16 Italian businessmen, grouped into a new company called CAI, stepped in with an offer to bail out the airline and invest EUR1 billion euros into it.

 

The plan aimed to break up the carrier into two, with Alitalia seeking bankruptcy protection for its troubled units and its profitable parts relaunched as a slimmed-down regional airline.

 

The government has said 3,250 workers would have been laid off under the plan but unions said the total number would have been about double that figure.

 

CAI withdrew its offer after six of Alitalia's nine unions refused to sign up to the plan as it stood. It said Alitalia's situation was "dramatic" and it was not possible to drag negotiations on any further. CAI said its shareholders had voted unanimously for the withdrawal.

 

The government-appointed special administrator for Alitalia, Augusto Fantozzi, has said that if no deal with CAI was reached the airline would be liquidated.

 

(Reuters)

 

Alitalia Limps On As Liquidation Looms

 

September 19, 2008

Alitalia was still flying on Friday but the Italian flag carrier faced liquidation in a matter of days after a rescue plan collapsed.

 

The airline cancelled 20 flights at Rome's Fiumicino Airport but blamed that on normal operational reasons rather than a lack of cash to buy fuel -- something which could lead aviation authorities to ground its planes.

 

Suffering from the high fuel prices and an economic downturn that have hit the sector globally, Alitalia has been on the brink of collapse for years as political interference and union unrest have bled it of cash and caused it to pile up debt.

 

A group of Italian investors withdrew their offer to buy profitable parts of the airline on Thursday after unions refused to accept the job losses and salary cuts it proposed.

 

The government said the only hope was if the consortium, CAI, put its offer back on the table and unions accepted the terms.

 

"There is no alternative to CAI. We need to return to the negotiating table because there is no-one else in the race," Employment Minister Maurizio Sacconi told Italian radio.

 

He ruled out any further intervention from the state which provided a EUR300 million euro (USD$435.2 million) loan earlier this year to keep the airline, which loses more than EUR2 million a day, flying. The European Commission is investigating that loan to see whether it constituted illegal state aid.

 

Economy Minister Giulio Tremonti told a cabinet meeting denationalizing Alitalia -- an idea mooted in the press -- was not an option, a government source said. The state owns a 49.9 percent stake in Alitalia; its floated shares have been suspended from trading since June.

 

Alitalia has been operating under bankruptcy protection since the end of August and its special administrator is due to meet Italy's civil aviation authority ENAC on Monday to see whether it can retain its operating license.

 

"If there is nothing concrete on the table, within a week or at most 10 days, the aircraft will no longer be allowed to take off," ENAC chairman told financial daily MF.

 

Alitalia's special administrator, Augusto Fantozzi, is seeking offers for the whole airline or its assets but has been turned down by the three major carriers he contacted.

 

"I have personally contacted the chairmen of Air France, Lufthansa and British Airways and they declined the invitation to make an offer, although they did express interest in the Italian market and the CAI initiative," Fantozzi wrote in an open letter to newspaper Corriere della Sera.

 

Transport Minister Altero Matteoli told one newspaper it was unrealistic to expect CAI to revive its offer unless the unions that had opposed it reversed their stance.

 

"If the unions were to call (CAI Chairman Roberto) Colaninno revising their position, maybe it would be possible to reopen talks, but I say that very hypothetically," he told La Stampa.

 

Alitalia's collapse would be a major blow to Berlusconi who, as leader of the opposition, said he would veto a plan to sell it to Air France-KLM, a deal which was also opposed by unions.

 

Air France-KLM withdrew its offer in April, shortly before Berlusconi won a landslide election victory.

 

Italian media have speculated other Italian companies might be persuaded to step in with a last-ditch rescue offer.

 

Mediobanca, touted as a white knight, would not comment. "As the situation is so problematic and delicate for several reasons, silence is golden," said CEO Alberto Nagel.

 

(Reuters)

 

The Gathering Clouds In Alitalia's Future

 

September 19, 2008

An eleventh-hour rescue bid for Alitalia collapsed on Thursday as a group of investors withdrew its offer for the Italian carrier in the face of union opposition over job cuts, lower pay and longer hours.

 

Prime Minister Silvio Berlusconi, who had pledged to find an Italian buyer for the airline, would not throw in the towel but said the carrier was facing an abyss.

 

Following are possible next developments for Alitalia:

 

-- Special administrator Augusto Fantozzi could start grounding planes if there is no money to pay for fuel.

 

He said on September 7 there were EUR30 million - EUR50 million euros left and Alitalia needs EUR70 million a month to survive -- putting it perilously close to penniless.

 

Suppliers started asking for deposits and payments in advance as soon as Alitalia sought bankruptcy protection on August 29.

 

-- The government might cast around for last-minute interest among major European airlines. Air France-KLM, whose own bid for Alitalia was also scuppered by unions, had said it could take a minority stake if the investor group bid went ahead.

 

Lufthansa has not commented on a specific bid but has frequently said Italy is an important market.

 

However, with high fuel prices battering airlines across the world, the prospect of taking on struggling Alitalia and its powerful unions is daunting.

 

-- Fantozzi may start layoffs for Alitalia's staff and initiate the process of support to find them new jobs.

 

He told unions a week ago that he would go ahead with this process if there were no agreement with CAI.

 

-- Alitalia could have its operating license withdrawn by Italy's civil aviation authority ENAC. It was given a six month provisional license earlier this month.

 

-- The government cannot give Alitalia any more state aid without risking the anger of the European Commission. Already, a EUR300 million loan from the previous government is being investigated to see if it breaks EU rules.

 

Fantozzi has said this loan -- which was turned into equity by Berlusconi's administration -- and a bond valued together at EUR750 million -- are unlikely to be repaid.

 

-- If bankruptcy proceedings go ahead, Fantozzi would sell off Alitalia's assets -- including its fleet, airport slots and ground services units -- to the highest bidder.

 

Fantozzi received expressions of interest for the airline's heavy maintenance and cargo units last week.

 

Aviation Management Consulting expressed interest in buying the airline's heavy maintenance operations including its Atitech unit, while Alis-Aerolinee Italiane and Miro Radici Finance expressed interest in buying the airline's cargo unit.

 

(Reuters)

 

 

[Naim 6]

Have never flown AZ, but feeling sorry for them.

 

=======

 

USA Today

20/09/08

 

Alitalia to keep flying "as long as there's money to pay for fuel"

"Alitalia was still flying on Friday but the Italian flag carrier faced liquidation in a matter of days after a rescue plan collapsed." That's from Reuters, which adds "Alitalia has been operating under bankruptcy protection since the end of August and its special administrator is due to meet Italy's civil aviation authority ENAC on Monday to see whether it can retain its operating license." The Wall Street Journal writes that a spokeswoman for Augusto Fantozzi, the administrator, "said Alitalia is likely to keep running 'as long as there's money to pay for fuel,' which is about two weeks."

 

As for Monday's meeting to discuss Alitalia's operating license, an unidentified source at ENAC tells Reuters this morning: "From Monday if there is no news procedures will be started and within a week, 10 days at most, if there is no positive outcome Alitalia flights will be stopped." The Journal says Fantozzi has kept Alitalia operating "for weeks, … burning through the carrier's depleted cash reserves" while trying to give the Italian government enough time to put a rescue deal in place. The government appeared to have put together such a package, but the investors behind the effort withdrew their bid yesterday after they could not get the support from all of Alitalia's unions.

 

Now, the Journal says "without a deal in place, Mr. Fantozzi doesn't appear to have any choice but to shut down the airline -- a move that could paralyze the country's airports and put Alitalia's 18,000 employees out of work. But a shutdown would be so politically bruising that Italian Prime Minister Silvio Berlusconi may still try to come up with some 11th-hour gambit." On that note, The Associated Press says Berlusconi now faces "a tough challenge … and a potential blow to his popularity in the crisis of Alitalia ... . Berlusconi, who returned to power after winning April elections, has promised he would rescue Alitalia and keep it in Italian hands."

 

Alitalia has always seemed to teeter on the brink, but this latest drama appears to be one of the airline's closest brushes yet with collapse. And with that news, customers appear to be getting nervous about Alitalia's future. AP notes the Italian "railway company said Friday it had added two extra train rides between Rome and Milan — the most highly traveled air route in Italy — following increased demand." Reuters adds Alitalia "cancelled 20 flights at Rome's Fiumicino airport (today) but blamed that on normal operational reasons rather than a lack of cash to buy fuel … ."

 

http://www.usatoday.com/travel/flights/ite...k=55847378.blog

 

[Y. J. Foo 0]

As always sad to see an airline failing, but you have to agree with such unions controlling (and f---ing up) the airline it seems easier to start from scratch than fix it.

 

Congratulations AZ unions, you have made your company on its way to the demise... Good luck finding your next job... :rolleyes:

[Yusoff 1]

I'm saddened by the title. That bad? Sad to see after more than 60 years in operation, the airlines spiraled down the economic drain... It's like you have fallen overboard, flapping and hanging to your dear life on a piece of wood, drifting, in a heavy storm...

[Pieter C. 5]

Alitalia May Lose License In Days, Invites Offers

 

September 22, 2008

Aviation authorities may withdraw Alitalia's license in 3-4 days if the administrator making a last-ditch attempt to sell it off does not present emergency cost-cutting measures at a meeting on Monday.

 

After the withdrawal of an Italian rescue bid because of opposition by pilots and cabin crew, the government-appointed administrator made a last bid to attract offers for Alitalia, although previous attempts to find a foreign buyer have failed.

 

Flights continued as usual but the state-controlled airline faces being grounded, and its assets liquidated, if there is no last-minute decision by dissident unions to accept the job cuts and slimmed-down contracts that the CAI consortium had offered.

 

"Alitalia is flying with a provisional license," the head of aviation body ENAC, Vito Riggio, said ahead of talks with the airline's special administrator at 10 am (0800 GMT).

 

"If the (cost-cutting) financial plan doesn't arrive in 3-4 days the license will be suspended," Riggio told local radio.

 

Suffering from the high fuel prices and an economic downturn that have hit the airline sector globally, Alitalia has been on the brink of collapse for years as political interference and union unrest bled it of cash and caused it to pile up debt.

 

Prime Minister Silvio Berlusconi, who made an election vow to rescue the airline, acknowledged this weekend that no foreign airline would step in and Alitalia may be doomed to bankruptcy.

 

Administrator Augusto Fantozzi invited offers of interest in all or part of Alitalia by September 30.

 

"The only significant offer... was withdrawn," Fantozzi said in the statement. "Therefore, the special administrator intends to verify the existence of other interested parties."

 

Fantozzi told one newspaper on Sunday that the tender would just "formalize what I have been doing -- without any results so far despite all my efforts -- regarding the main assets".

 

The only interest has been in Alitalia's heavy maintenance, cargo, handling and catering units and call center. Fantozzi has contacted Air France, Lufthansa and British Airways, but said: "Nobody has stepped forward."

 

A tender for the state's 49.9 percent stake by the previous government attracted 11 bidders who all pulled out.

 

A second attempt led to Air France-KLM being picked as buyer but the deal fell down on opposition by unions and Berlusconi, who was campaigning for office and said Alitalia must stay Italian.

 

The media mogul returned to power in May promising to rescue it and used his influence to rally 16 investors in the CAI consortium.

 

But CAI withdrew its offer last Thursday and has said it will not modify its offer to make it more acceptable to unions.

 

The government rules out further state aid or, as some leftists propose, the renationalization of Alitalia. Italy is already in trouble with the European Commission over a EUR300 million euro (USD$435.2 million) loan to keep the airline flying.

 

(Reuters)

 

[Pieter C. 5]

Alitalia's Days Numbered, Last-Ditch Offers Sought

 

September 22, 2008

Alitalia will lose its operating license if a special administrator making a last-ditch attempt to sell the airline does not give Italy's aviation authority a credible new offer or cost-cutting plan by Thursday.

 

Following the withdrawal of an Italian rescue bid because of opposition by pilots and cabin crew, the government-appointed administrator made a last attempt on Monday to attract offers, although previous bids to find a foreign buyer have failed.

 

Prime Minister Silvio Berlusconi's spokesman Paolo Bonaiuti acknowledged that "buyers are not queueing up for Alitalia".

 

Pilots and crew attempted to attract alternatives to the CAI consortium's rescue bid on Monday by saying they would put up their own pay and pensions, totalling EUR340 million euros, "to back any serious, credible project for the relaunch of Alitalia".

 

But so far, the only interest has been in the state-controlled airline's heavy maintenance and cargo units as well as in leasing unused aircraft and laid-off staff. On Monday, Swiss investment firm AMA Asset Management Advisers said it was interested in buying or renting 30 Alitalia planes.

 

Flights continued as usual but Alitalia faces being grounded, and its assets liquidated, if there is no last-minute decision by dissenting unions to accept the job cuts and slimmed-down contracts that the CAI consortium had offered.

 

"Alitalia is flying with a provisional license," the head of aviation body ENAC, Vito Riggio, told local radio ahead of talks with special administrator Augusto Fantozzi early on Monday.

 

He said afterwards that Fantozzi was given until Thursday to present "a report on the company's prospects, any offers to buy it or a cost-cutting plan" in order to keep its license.

 

ENAC would then have three days to evaluate the response, but Fantozzi himself told reporters: "If my report does not satisfy the authority, I will seek the suspension of the license."

 

Suffering from the high fuel prices and economic downturn that have hit the airline sector globally, Alitalia has been on the brink of collapse for years as political interference and union unrest bled it of cash and caused it to pile up debt.

 

Berlusconi, who made an election vow to rescue the airline, said this weekend no foreign rival would step in and that the national carrier, which employs 19,000 people, may be doomed to bankruptcy.

 

Fantozzi invited offers of interest in all or part of Alitalia by September 30, without its debts

 

"The only significant offer... was withdrawn," Fantozzi said in the statement. "Therefore, the special administrator intends to verify the existence of other interested parties."

 

He told daily paper Il Messagero on Sunday the tender would just "formalize what I have been doing -- without any results so far -- regarding the main assets".

 

Fantozzi has renewed contacts with Air France, Lufthansa and British Airways, but said: "Nobody has stepped forward."

 

A tender for the state's 49.9 percent stake by the previous government attracted 11 bidders who all pulled out.

 

A second attempt led to Air France-KLM being picked as buyer but the deal met opposition from unions and Berlusconi, who was campaigning for office and said Alitalia must stay Italian.

 

The media mogul returned to power in May and rallied 16 investors in the CAI consortium, which finally withdrew its offer on Thursday. The government has ruled out further state aid or the denationalization of Alitalia.

 

(Reuters)

 

Swiss Firm Interested In 30 Alitalia Planes

 

September 22, 2008

Swiss investment company AMA Asset Management Advisor said on Monday it was interested in acquiring 30 planes from Alitalia to operate on routes between Italy and Eastern Europe.

 

The company said in a statement it had proposed buying at least half of Alitalia's fleet of 30 MD-82s and ATR-72s and renting the rest under a "wet lease" contract.

 

AMA said they would be used to operate passenger flights on at least 11 routes out of Milan's Malpensa and Rome's Fiumicino airports to destinations in the Balkans and Eastern Europe.

 

Alitalia's government-appointed special administrator made a last attempt to attract offers for the airline or its assets on Monday, after an Italian rescue bid was withdrawn, by inviting offers of interest in all or part of the company by September 30.

 

(Reuters)

 

[Pieter C. 5]

Italy Plays Down Stressed Alitalia Pilot Worries

 

September 23, 2008

Italy's aviation body and Alitalia pilots reassured passengers on Tuesday they were in safe hands, after a warning that a failed rescue deal for the airline would have put pilots under dangerous pressure.

 

The loss-making national airline has been sticking to its flight schedules despite the prospect of losing its operating license in a few days, unless the special administrator comes up with a credible new offer or cost-cutting plan by Thursday.

 

Many domestic travellers have little choice but to fly Alitalia. Civil aviation authority ENAC said they had no reason to worry about the pilots, who are blamed by the government for scuttling a rescue offer by the CAI consortium last week.

 

"All operations are currently being carried out regularly and safely," said ENAC chief Vito Riggio.

 

CAI withdrew its offer after pilots and cabin crew rejected its conditions of 3,250 job losses and slimmed-down contracts.

 

Comments on Monday from the head of the ANPAC pilots' union, Fabio Berti, about "psychological pressure" on crews from such contracts, and consequences for safety, sparked some concern.

 

But Berti said on Tuesday: "I never said Alitalia pilots are stressed and that passengers should be afraid because of this."

 

"Despite the grave situation Alitalia pilots are maintaining normal operations and maximum standards of safety," said Berti, adding that he had been talking about "hypothetical" contracts that "don't take into account crews' fatigue and stress levels."

 

Riggio said he had taken the extra precaution of sending two ENAC flight inspectors to "check the state of the pilots".

 

The government-appointed administrator, Augusto Fantozzi, published an invitation for offers for all or part of Alitalia by September 30, in a final attempt at finding a buyer.

 

His attempts at arousing interest from foreign airlines such as Air France, Lufthansa and British Airways appear to have come to nothing so far.

 

Alitalia has not made a profit since 1999 and its work force of 19,000 is highly-unionized and notorious for striking.

 

A tender for the state's 49.9 percent stake by the previous government attracted 11 bidders who all pulled out.

 

A second attempt led to Air France-KLM being picked as buyer but the deal met opposition from unions and Silvio Berlusconi, who was campaigning for office and said Alitalia must stay Italian.

 

"There's no offer and in fact there is not even the CAI offer any more," said Transport Minister Altero Matteoli.

 

Berlusconi returned to power in May and rallied local investors behind CAI's rescue bid, withdrawn last Thursday. The government ruled out more state aid or denationalizing Alitalia.

 

Berlusconi's spokesman Paolo Bonaiuti did not expect a last-minute reprieve for the CAI offer, saying that "even if (unions) changed their minds now, it would be difficult to bring the Italian business consortium back to the table".

 

He also appeared to rule out more intervention by the prime minister, saying: "Berlusconi has already done his part, which was to bring the two sides together."

 

(Reuters)

 

ARRIVEDERCI ALITALIA !!!

 

[Pieter C. 5]

Alitalia Hopes Revived As PM Aide Meets Consortium

 

September 24, 2008

Prime Minister Silvio Berlusconi's right-hand man met on Wednesday the consortium whose offer for Alitalia was withdrawn, as the media speculated the premier could pull off a last-minute deal to save the airline.

 

With the Thursday deadline looming for Alitalia to present a new rescue plan, or lose its operating license next week and see more than 19,000 workers sacked, Berlusconi cancelled a visit to the UN General Assembly in New York to attend to the crisis.

 

The Italian media reported revived interest from Lufthansa -- despite its repeated insistence that it was not interested in a direct acquisition unless Alitalia's problems were resolved -- and, unexpectedly, from Venezuelan airline Aserca.

 

Corriere della Sera said the Venezuelans -- "with the help of the socialist government" of Hugo Chavez -- wanted to take part in the new auction and "resolve a good part of the problems affecting Alitalia and all of its workers at the moment".

 

It is unclear how conservative leader Berlusconi would deal with such an offer.

 

Cabinet ministers, who had been gloomily saying there was little chance of a reprieve for the CAI consortium's offer due to union opposition, and that no buyers had emerged from among major foreign airlines, began to sound more upbeat.

 

"It's too much to talk about optimism, but you could say hopes have been revived," Transport Minister Altero Matteoli said, after Berlusconi's most senior cabinet aide, Gianni Letta, met the president and the chief executive of CAI for an hour.

 

The head of Italy's biggest union, the CIGL, which rejected CAI's conditions of 3,250 job cuts and downgrades in contracts, as did pilots and cabin crew, also said there was a possibility of renewed talks.

 

"If we sort out the things that were done badly in the rush, and pay attention not to the strongest but the weakest, a step forward could be taken," CIGL boss Guglielmo Epifani told local television, talking of "decisive hours" for Alitalia's future.

 

Berlusconi warned last weekend no foreign buyers were coming forward and Alitalia may go bankrupt. He had ruled out modifying CAI's offer and says it is unions who have to cede.

 

But he appeared to change his tune late on Tuesday when he said: "I remain convinced that we must find a solution so that Italy continues to have its own flag carrier."

 

Berlusconi returned to power in May promising to rescue the airline, which has not made a profit since 1999 and loses about EUR 2 million euros a day. The media mogul rallied local investors behind a rescue bid but this was withdrawn last Thursday.

 

In a final attempt at finding a buyer, government-appointed special administrator Augusto Fantozzi on Tuesday published an invitation for offers for all or part of Alitalia by September 30.

 

His attempts at arousing interest from airlines such as Air France, Lufthansa and British Airways appear to have come to nothing, though there has been interest in buying or leasing aircraft and taking over, but not necessarily buying, slots.

 

British budget carrier easyJet said it could take over some domestic routes and one paper said Air France-KLM and Lufthansa want slots on the Rome-Milan route.

 

Alitalia has stuck to flight schedules despite the prospect of being grounded. Many domestic travellers have little choice but to fly Alitalia, but it is also a source of national pride.

 

A tender for the state's 49.9 percent stake by the previous government attracted 11 bidders who all pulled out.

 

A second attempt led to Air France-KLM being picked as buyer but the deal met opposition from unions and Berlusconi, who was campaigning for office and said Alitalia must stay Italian.

 

(Reuters)