News: Alitalia crisis deepens
Flights > News > # 1885 (12/09/2008)
Investors have pulled out of talks to rescue Italy’s national airline Alitalia today (September 12), blaming unions for refusing to face up to cutbacks which would avert collapse.
Talks ran past a deadline set by the government-appointed administrator for a deal to avert bankruptcy for the airline.
But then the investors, who were prepared to put up €1 billion (£800 million), said that they were ending the talks.
The special administrator Augusto Fantozzi had warned unions on Wednesday that if a deal on restructuring were not reached before Friday, the company would be made bankrupt quickly and he would begin to dismiss staff.
Fantozzi was appointed last month when the airline asked to be declared insolvent.
By the end of September, Alitalia will have available funds of only €30 million to €50 million (£24 million to £40 million).
Alitalia has lurched for years from crisis to crisis, and from restructuring plans to this takeover rescue scheme.
The last rescue, based on a takeover by French airline Air France-KLM, ended in April when the French company walked away from talks because unions rejected the terms.
Italy’s billionaire Prime Minister Silvio Berlusconi also said he would put togther an Italian consortium to pull Alitalia round.
The latest talks on restructuring conditions hit deadlock over proposed job losses, cuts in pay and holidays, and the application of a single employment contract across the group.
The Italian state owns 49.9 percent of the airline which has been surviving on a state loan of €300 million (£240 million) made at the end of April.
Alitalia operate flights to Milan Linate and Rome Da Vinci from London Heathrow.
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