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Alitalia unions reject revised Air France-KLM bid

Latest update : 2008-03-28

Trade unions at Italy's bankrupt airline Alitalia on Friday rejected a revised takeover bid by Air France-KLM, but kept the door open for further negotiations next week. (Report: K Spencer)

Air France-KLM on Friday failed for a second time to get Alitalia's unions on board for the European giant's move to take over the nearly bankrupt Italian flag carrier but new negotiations were set for next week.
All nine of the unions representing Alitalia's 11,000-strong work force on Friday rejected a revised version of the takeover plan but agreed to meet with Air France-KLM chairman Jean-Cyril Spinetta on Monday.
A spokeswoman for Spinetta confirmed to AFP in Paris that he would travel to Rome for the talks.
Under the revised offer, the Franco-Dutch company reiterated its intention to cut 2,100 jobs but sweetened severance terms and offered to absorb more than 4,000 workers from the company's ground services unit.
The new proposal "substantially repeats what has already been shown to the unions," eight of Alitalia's nine labour unions said in a joint statement, adding that the unions "reconfirm that they find (the offer) inadequate."
The pilots union ANPAC was the first to reject the new plan early Friday.
"For us pilots the Air France plan is over. It's a closed chapter," ANPAC chief Fabio Berti told Italy's Canale 5 television. "Everything we expected was confirmed in substance. There's no improvement."
The national secretary of the transport union UIL, Marco Veneziani, said for his part: "If this is the final proposal, it's return to sender."
A first round of talks with the unions, who fear that job cuts could reach up to 7,000, ended in disagreement last week.
Alitalia management was expected to decide by the end of the day on Friday to extend an initial Monday deadline for the unions to reach agreement with Air France-KLM, according to the business daily Il Sole 24 Ore.
Management must also take a hard look at short-term financial needs as Alitalia is on the brink of bankrupcy, losing some one million euros (1.6 million dollars) a day.
The company is seeking a bridging loan of 300 million euros from the government to tide it over until the promised recapitalisation of some one billion euros promised by Air France-KLM in the takeover deal.
Trading in Alitalia shares was suspended for several hours on Friday and the unit, which has been on a roller coaster for the past two weeks, closed the day 37 percent down at 40 euro cents.
Air France-KLM's new plan calls for a generous severance package for about 1,600 employees to be laid off from Alitalia's flight operations and 500 from the ground services unit AZ Servizi, which is to be shut down in eight years.
The European giant wants all categories of workers to accept the terms of its takeover plan before proceeding.
Spinetta said after the failed talks last week that "the room for manoeuvre is very small or non-existent."
Italy's outgoing centre-left government on March 17 approved the acquisition through a share swap of one Air France-KLM share for every 160 Alitalia shares, valuing the Italian airline at 140 million euros.
The takeover plan also entails massive cutbacks of operations at Milan's Malpensa airport and is opposed by many politicians in the north, a right-wing stronghold, with general elections in a little over two weeks.
The future of the ailing flagship airline has become a key election issue ahead of the April 13-14 polls that outgoing opposition leader Silvio Berlusconi is tipped to win.
Berlusconi has made frequent assertions of an all-Italian alternative to Air France-KLM, while the specifics of a homegrown consortium remain unclear.
The centre-right leader, a self-made billionaire from Milan, said last Friday he would reject the Air France-KLM plan out of hand if elected, and the French-Dutch airline has said it would not go forward without the approval of the next government.

Date created : 2008-03-28