Alitalia facing collapse as unions reject €400m offer

ITALY’S AILING state carrier, Alitalia, last night appeared to move one step closer to collapse following the decision of the Compagnia Aerea Italiana (CAI) consortium to withdraw its €400 million offer for the company.

CAI had given the nine trade unions representing Alitalia workers a 3.30pm deadline yesterday, stating that if they did not agree to the consortium’s takeover proposals, it would withdraw the offer. While four mainstream confederated unions agreed to the CAI offer, five autonomous unions representing pilots and cabin staff rejected it.

The CAI consortium, heavily sponsored by Italian prime minister Silvio Berlusconi, was generally seen as a last chance for Alitalia. Although the company’s flights suffered no disruption in either Milan or Rome airports yesterday, Alitalia and its 18,500 workers clearly face a highly uncertain future.

State-appointed administrator August Fantozzi guaranteed last night the company would continue to operate, even though it was fast running short of cash reserves, adding: “A lot will depend on what happens in the next few days . . . We’re losing passengers because of all this negative publicity . . . our costs are rising every day.”

Alitalia, which has recorded an annual profit only four times since its foundation in 1946, has been in crisis for most of the last decade. It is estimated to have lost €15 billion in the last 15 years and is currently losing about €2 million a day.

Within minutes of the failure of the CAI takeover, senior government and opposition figures were pointing fingers of blame. Mr Berlusconi blamed the leftist CGIL trade union and the pilots, while several figures on the left argued the prime minister himself was to blame because of what shadow finance minister Pierluigi Bersani called his “electoral cynicism”.

Mr Bersani was referring to the fact that, during this spring’s general election campaign, Mr Berlusconi had made Alitalia an electoral issue, campaigning vigorously against the plans of the Romano Prodi-led centre-left government to sell Alitalia to Air France-KLM. Sounding a nationalist drum, Mr Berlusconi had argued a takeover by an Italian business consortium would be much more in the country’s interests.

Mr Berlusconi’s opposition is widely believed to have prompted Air France to withdraw its offer last April.

The French-Dutch company had offered €138.5 million for the company as part of a takeover package that envisaged 2,100 lay-offs and an investment of €850 million over the next two years. In contrast, CAI’s industrial plan envisaged 6,000 lay-offs and a 30 per cent across-the-board salary cut.

While labour minister Maurizio Sacconi last night predicted the imminent “collapse of the entire Alitalia group”, Italian civil aviation authority ENAC confirmed it had summoned Mr Fantozzi for a meeting next Monday to confirm that Alitalia meets all the statutory and financial requirements for its operating licence.