lowprofilepilot
13th Sep 2008, 00:29
From Forbes Magazine...........................................
LONDON -
The future of Alitalia is looking increasingly bleak now that its unions have failed to respond to an ultimatum from the Italian government, and thus thwarted an agreement with a group of Italian investors who are the airline's last remaining hope for survival.
Alitalia's nine unions said they had suspended talks over "insurmountable difficulties" on Friday. Talks were set to resume later in the day but the Italian government isn't too hopeful: Labor Minister Maurizio Sacconi said that the state of talks "made us fear the worst."
After struggling to find a bidder willing to take on the airline, which loses an estimated 2.0 million euros ($2.8 million) a day, the government has managed to scramble together a group of Italian investors, under a plan put together by Intesa San Paolo, a bank. The investors, who include the Benetton family, plan to inject 1.0 billion euros ($1.7 billion) into the airline before mergeing the carrier with another airline called Air One, and then selling assets that include Alitalia's cargo and heavy maintenance units.
The plans also include cutting up to 7,000 of the company's 20,000 staff, and making changes to their benefits and flight routes, or face mass layoffs--this appears to have been the main sticking points for the airline's trade unions, with the pilots and flight attendants unions proving particularly stubborn.
Alitalia's unions had been given an ultimatum by Augusto Fantozzi, the airline's administrator, to agree to new changes to the streamlined company or face layoffs as early as next week. The deadline was initially set for Thursday, but the government allowed the deadline to be extended to Friday morning.
This is the second time that unions have proved disruptive to the Italian government's attempt to find a buyer for the beleaguered national carrier. Air France-KLM (other-otc: AFLYY (http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=AFLYY) - news (http://www.forbes.com/markets/company_news.jhtml?ticker=AFLYY)- people (http://www.forbes.com/peopletracker/results.jhtml?startRow=0&name=&ticker=AFLYY)) walked away (http://www.forbes.com/markets/2008/04/03/alitalia-air--france-equity-cx_vr_0403markets06.html) from a significant investment in the company in April after failing to get union backing for its plan. "Italian unions are known for their combative stance, so the fact that they are refusing to cooperate is part of the course," said Global Insight analyst Dragana Ignjatovic.
For Italian Prime Minister Silvio Berlusconi, at least, the pressure is off. "He has lived up to his pledge to find a domestic consortium," said Ignajotovic, referring to the billionaire's promise (http://www.forbes.com/facesinthenews/2008/05/13/berlusconi-alitalia-nationalize-markets-face-cx_vr_0513autofacescan02.html) during his election campaign to keep Alitalia largely in Italian hands. Berlusconi may have even succeeded in getting back Air France-KLM as an investor. Jean-Cyril Spinetta, chief executive of the Franco-Dutch airline, has publicly acknowledged that his airline is considering a stake. (See "Foreign Partners Complete Alitalia Jigsaw." (http://www.forbes.com/markets/2008/08/29/alitalia-lufthansa-klm-markets-equity-cx_vr_0829markets09.html))
LONDON -
The future of Alitalia is looking increasingly bleak now that its unions have failed to respond to an ultimatum from the Italian government, and thus thwarted an agreement with a group of Italian investors who are the airline's last remaining hope for survival.
Alitalia's nine unions said they had suspended talks over "insurmountable difficulties" on Friday. Talks were set to resume later in the day but the Italian government isn't too hopeful: Labor Minister Maurizio Sacconi said that the state of talks "made us fear the worst."
After struggling to find a bidder willing to take on the airline, which loses an estimated 2.0 million euros ($2.8 million) a day, the government has managed to scramble together a group of Italian investors, under a plan put together by Intesa San Paolo, a bank. The investors, who include the Benetton family, plan to inject 1.0 billion euros ($1.7 billion) into the airline before mergeing the carrier with another airline called Air One, and then selling assets that include Alitalia's cargo and heavy maintenance units.
The plans also include cutting up to 7,000 of the company's 20,000 staff, and making changes to their benefits and flight routes, or face mass layoffs--this appears to have been the main sticking points for the airline's trade unions, with the pilots and flight attendants unions proving particularly stubborn.
Alitalia's unions had been given an ultimatum by Augusto Fantozzi, the airline's administrator, to agree to new changes to the streamlined company or face layoffs as early as next week. The deadline was initially set for Thursday, but the government allowed the deadline to be extended to Friday morning.
This is the second time that unions have proved disruptive to the Italian government's attempt to find a buyer for the beleaguered national carrier. Air France-KLM (other-otc: AFLYY (http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=AFLYY) - news (http://www.forbes.com/markets/company_news.jhtml?ticker=AFLYY)- people (http://www.forbes.com/peopletracker/results.jhtml?startRow=0&name=&ticker=AFLYY)) walked away (http://www.forbes.com/markets/2008/04/03/alitalia-air--france-equity-cx_vr_0403markets06.html) from a significant investment in the company in April after failing to get union backing for its plan. "Italian unions are known for their combative stance, so the fact that they are refusing to cooperate is part of the course," said Global Insight analyst Dragana Ignjatovic.
For Italian Prime Minister Silvio Berlusconi, at least, the pressure is off. "He has lived up to his pledge to find a domestic consortium," said Ignajotovic, referring to the billionaire's promise (http://www.forbes.com/facesinthenews/2008/05/13/berlusconi-alitalia-nationalize-markets-face-cx_vr_0513autofacescan02.html) during his election campaign to keep Alitalia largely in Italian hands. Berlusconi may have even succeeded in getting back Air France-KLM as an investor. Jean-Cyril Spinetta, chief executive of the Franco-Dutch airline, has publicly acknowledged that his airline is considering a stake. (See "Foreign Partners Complete Alitalia Jigsaw." (http://www.forbes.com/markets/2008/08/29/alitalia-lufthansa-klm-markets-equity-cx_vr_0829markets09.html))