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Talks breakdown in Alitalia takeover

Latest update : 2008-04-04

Air France-KLM has ended talks with Alitalia, leaving the carrier on the edge of bankruptcy ten days before Italian general elections. (Report: A.Roy)

Air France-KLM called an end to negotiations over the takeover of ailing Italian carrier Alitalia after talks with Italian unions ended in bitter disagreement.

 

Soon after, Alitalia’s chief executive Maurizio Prato announced his resignation. “This company is cursed,” he reportedly said, adding that “only an exorcism could save it”. According to FRANCE 24’s Douglas Herbert, “Alitalia has long been a moribund company, while the Air France-KLM bid was probably its last chance to rise again”.

 

The company has been losing a million Euros every day for over a year. In fact, it has been kept alive for several years through regular state bailouts. Last in line for a takeover of Alitalia following the withdrawal of Lufthansa and the defeat of Air One’s bid, Air France-KLM had tied its 138-million-Euro offer to the firing of 2,100 Alitalia workers.

 

Even in the face of rejection by the unions, the Franco-Dutch company has left the door half-open. “I believed deeply in this project and continue to believe in it,” group chairman Jean-Cyril Spinetta said.

 

But the present situation remains dire. France 24 journalist Nicolas Luiset believes that Italy is likely to lose its flag carrier, which in the 1970s was one of the top three European airlines.

 

Waiting for the elections

 

 
Italy’s minister for the economy, Tommaso Padoa-Schioppa, has already threatened to look into a possible reorganization of the group or have it file for bankruptcy. Anxious, one of the trade unions begged the government to postpone a decision until after the general elections on April 13 and 14, in which the fate of Alitalia has played an important role.

 

Opposition leader Silvio Berlusconi, who is leading in the polls, promises that he would set up a consortium of Italian investors so that the company remains in Italian hands. The proposal, which is improbable according to specialists, looks like “a closely guarded secret” concluded Douglas Herbert ironically.

 

Trading of Alitalia shares has been suspended until an extraordinary board meeting scheduled for Thursday afternoon decides on the future of the company.

 

Date created : 2008-04-03

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