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Italy makes last-minute attempt to rescue Alitalia

The Italian government held emergency talks on Sunday in an effort to save Alitalia from collapse. The airline recently announced that it would have to start cancelling flights from Monday as it can no longer afford fuel supplies.

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The Italian government scrabbled to save Alitalia from collapse
on Sunday, less than 24 hours before the airline has said it might start
cancelling flights as it cannot secure fuel supplies.

 

Emergency talks at the office of Prime Minister Silvio
Berlusconi ran late into Saturday without breaking the deadlock
between unions and a consortium of Italian investors that has
agreed to buy profitable parts of the carrier.

 

"Alitalia: final call," ran the headline on La Repubblica
daily. Talks were due to resume later on Sunday between
ministers and unions.

 

Italy's civil aviation authority said on Saturday that
Alitalia's operating licence was at risk after the airline
confirmed media reports that it was having trouble buying jet
fuel from wary suppliers.

 

Letting Alitalia collapse would be a huge political blow
for Berlusconi who promised voters he would use his business
contacts to find an Italian buyer for the near-bankrupt
airline.

 

Unions have rejected the terms of the takeover offer which
would mean thousands of job cuts and lower pay as the airline
would be reborn as a smaller carrier, stripped of loss-making
operations and its debt pile.

 

But with the other option likely to be the total collapse
of the airline, where all 20,000 employees would lose their
jobs, unions hinted there was some room for manoeuvre.

 

"We all need to have a bit more flexibility and find a
balancing point, everyone giving something up," Raffaele
Bonanni, head of the CISL union, told Il Giornale daily.

 

With only a few hours remaining to agree a rescue plan,
stakes were high for all concerned. La Stampa daily said there
was a "firm belief that a collapse would be a serious blow not
only for the government but also for unions, workers, employers
and, in fact, the entire country".

 

The investor group CAI has said publicly it would not give
any more concessions but La Repubblica said CEO Roberto
Colaninno had improved his offer on salaries, reducing pay cuts
to 20 percent, from around 25 percent.

 

Once a symbol of Italy's post-war boom, Alitalia has for
years suffered from political interference, labour disputes,
financial woes and most recently from soaring fuel costs --
which are weighing on airlines around the world.

 

Britain's third largest package holiday operator, XL
Leisure Group, grounded all flights on Friday after going into
administration. Discount transatlantic carrier Zoom Airlines
began bankruptcy proceedings last month.

 

Alitalia's shares have been suspended since June. It is
operating under a bankruptcy commissioner who has said the only
alternative to the rescue plan is liquidation, a procedure he
has held back from starting while last-ditch talks go on.

 

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