ITALY:THE FATE of Italy's ailing national carrier, Alitalia, hung in the balance yesterday as trade union representatives met with Jean-Claude Spinetta, chairman of Air France-KLM, the French-Dutch airline that has made an offer for the Italian carrier, writes Paddy Agnewin Rome.
Finance minister Tommaso Padoa-Schioppa last weekend suggested that Alitalia might be just weeks away from bankruptcy, as it is currently running at a loss of €1 million per day while its overall debt is reported to be €1.28 billion.
Given that context, the outgoing centre-left government of Romano Prodi, acting in a caretaker capacity until the April 13th-14th general election, has agreed to sell the finance ministry's 49.9 per cent stake to the French-Dutch airline.
Air France-KLM has offered €138.5 million for Alitalia as part of a takeover package that promises an investment of €850 million over the next two years.
However, the Air France-KLM offer also envisages dropping Milan's Malpensa airport as a hub, reducing Alitalia's cargo operations and enacting up to 2,100 lay-offs in Alitalia's 20,000 strong workforce.
Alitalia's delicate situation has been complicated by the ongoing election campaign. Last weekend, media tycoon and centre-right leader Silvio Berlusconi said that, if elected prime minister at next month's elections, he would block the Air France-KLM deal.
Opinion polls put Mr Berlusconi six to seven points ahead of his major centre-left opponent, former Rome mayor Walter Veltroni.
Mr Berlusconi seemed to suggest there was still time for another offer for the company from an Italian consortium, adding that his children, both senior executives in the family media empire, would invest in such a consortium.
That offer prompted infrastructure minister Antonio di Pietro to accuse Mr Berlusconi of "insider trading" while Mr Veltroni argued that time was running out for Alitalia.
In an interview last weekend with the Financial Times, finance minister Padoa-Schioppa appeared to criticise Mr Berlusconi when he said: "People keep dreaming that there is more time, alternative buyers, alternative solutions.
"Alitalia has oxygen for a matter of weeks . . . We are not in the field of policy discretion but in the field of the dynamics of an economic and financial crisis. Everyone is playing brinkmanship. The centre of gravity of the company is being shifted irresponsibly beyond the brink."
Mr Berlusconi's intervention in the Alitalia debate also came in for criticism yesterday from foreign minister Massimo d'Alema, who pointed out that the former prime minister seemed to be more concerned about the fate of Malpensa airport than of Alitalia.
He said, "The fate of the company, which faces bankruptcy because there is no serious alternative to Air France, seems not to interest Berlusconi."
Yesterday's negotiations hardly started against an ideal background, with Alitalia workers staging a protest outside the company's Rome headquarters.
Trade union representatives were reportedly disappointed with the initial offers made yesterday by Air France chairman Mr Spinetta, but the French-Dutch company has promised that it will present new and more detailed proposals on Friday.
In a widely carried interview yesterday, Mr Prodi called on the unions to act responsibly, claiming that a previous potential buyer of Alitalia, the German airline Lufthansa, had been scared off by the unions' attitude.