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Apr-13-2008Alitalia risks licence suspension in 2-3 weeks if no Air France ...(topic overview)
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At the same time Italy's government said it is willing to take an active role to try to revive Air France-KLM's takeover plans. It is proposing more talks with Alitalia's unions next week to verify conditions for a deal, but with an election due, the government could be out of office by then. This frustrated worker said: "The Alitalia model plane we put into the Trevi fountain is a symbol for us that they are letting Alitalia sink for good. [1] After holding meetings with unions, the government said more talks would take place next week. It reiterated in a statement that a sale to Air France-KLM is the "only concrete solution" to Alitalia's crisis. Both unions and Air France-KLM have left the door open for more talks, but with national elections looming Sunday and Monday it is unlikely any decisive action would be taken until after a new government is in place. Air France-KLM broke off talks on its takeover offer last week citing demands by unions.[2]
MILAN (Thomson Financial) - Alitalia SpA will have its operating licence suspended in two or three weeks if its tie-up with Air France-KLM is not agreed quickly, said Vito Riggio, president of Italy's aviation regulator ENAC. In an interview in Saturday's Corriere della Sera, Riggio said EU rules require Alitalia to have at least a year's financial liquidity and ENAC is conducting checks to see if this is the case. 'Within two weeks, a maximum of three, if Alitalia does not explain to us how it plans to restore 12 months of liquidity, we can't do anything else other than suspend its licence,' he said. ENAC previously cleared Alitalia to continue operating, despite its limited liquidity, because of prospects for a tie-up with Air France-KLM (nyse: AKH - news - people ), he said. Talks between Air France-KLM and Alitalia's trade unions broke down 10 days ago, though both sides are reportedly willing to talk again after Italy's general election, which ends Monday afternoon.[3]
The outgoing centre-left government intends to midwife the proposals rather than presenting a plan itself, Letta said, contrary to statements attributed to the government in earlier news reports on Thursday. "Air France-KLM wants to wrap up the (Air France chairman Jean-Cyril) Spinetta plan," he added, warning that the French-Dutch group would not return to Rome for "empty negotiations." A "new meeting (between Air France and Alitalia's unions) would be to close the deal," he added. "This second and last chance must become concrete over the next days and far from the toxicity of the electoral campaign that has so damaged the company," Letta told the unions in a speech, the text of which was released by the prime minister's office.[4] Letta stressed that Air France was not looking to engage in another lengthy series of talks, but when the two sides meet again, it will be to finalize the deal. According to Letta this will be the '''last chance''' for the airline, noting that the deal must no longer be the subject of bitter election politics, which have '''so damaged''' Alitalia. As we reported earlier this week, former Prime Minister Silvio Berlusconi, and currently the centre-right frontrunner to succeed Prodi, has expressed his disapproval of Alitalia'''s sale to Air France, suggesting instead that it be sold to a consortium of Italian businesses and investors. Alitalia only has '''170 million left in its chest to fund its short-term operations and the carrier reportedly loses more than $1.6 million each day that it operates flights.[5]
Loading. The government and the carrier'''s board both seem to realize that they have virtually no options left, but to accept Air France'''s purchase offer if they want to save Alitalia from bankruptcy. Letta also told journalists at a press conference in Rome that the Italian government would assume an '''active role''' in this process and that hesitant unions in Italy would be urged to sign the agreement early next week.[5] ROME, April 10 (Reuters) - Italy's government, which owns a 49.9 percent stake in Alitalia (AZPIa.MI: Quote, Profile, Research ), said in a statement it was willing to take an active role to help conclude a deal between the carrier and Air France-KLM (AIRF.PA: Quote, Profile, Research ). It said it would reconvene Alitalia's unions by next week to verify conditions for a deal.[6] ROME (Reuters) - Italy's government on Thursday sought to convince Alitalia's (AZPIa.MI: Quote, Profile, Research ) unions that a takeover by Air France-KLM was the ailing carrier's only option, telling labor groups they had one last chance to agree to a deal.[7]
One group tossed a 2-metre (6 ft 7 in) model Alitalia aircraft into the nearby Trevi fountain, much to the amusement of tourists. Air France-KLM (AIRF.PA: Quote, Profile, Research ) walked away from a takeover last week over union opposition, but later said salvaging a deal was "up to Alitalia, its employees and unions".[7]
Conservative candidate Silvio Berlusconi has repeatedly insisted that an all-Italian alternative to the Air France-KLM takeover is possible. Tense negotiations ended dramatically last week when Spinetta withdrew the airline's offer after the unions asked that Alitalia conserve all of its operations.[4] Alitalia chairman Maurizio Prato resigned in frustration. Air France-KLM said its offer for Alitalia was the only one capable of returning the struggling airline to profitable growth and that it was now up to the unions and workers to decide the way forward. The hard-bargaining unions appeared ready to soften their positions this week.[4]
ROME (AFP) — The Italian government pledged Thursday to take an "active role" in trying to convince Air France-KLM to reopen takeover talks with unions at the country's failing carrier Alitalia.[4] The Italian government, which owns just under half of Alitalia, has been trying to convince the unions that a takeover by Air France-KLM is the near bankrupt carrier's only option.[1]
'There is already a fall in filling of aircraft and a collapse of ticket sales. Next week, we will have a technical meeting with Alitalia,' he said. Riggio said he hoped the Air France-KLM solution would return, noting that there is no sign of a consortium of Italian businessmen to take over Alitalia. During the election campaign, centre-right leader Silvio Berlusconi talked of such a consortium, which would make bid after due diligence checks.[3] According to a source at the meeting, Letta said the government will present Air France-KLM with a plan next week aimed at persuading it to return to talks.[7] 'Two months ago, Alitalia explained that serious talks were under way with Air France-KLM that would have resolved the issue.[3]
Now, after the breakdown of the talks, we have looked again,' Riggio said. The situation is 'dramatic' because until there is a buyer, no bridging loan can be made to tide Alitalia over until completion of a deal, he said. A suspension of the Alitalia licence would not necessarily ground all the airline's planes because ENAC could grant a provisional licence linked to an emergency plan for the airline, he said. Before deciding, ENAC needs two weeks to see the size of Alitalia's March losses, what savings it has made by cutting some activities at Milan's Malpensa airport, as well as load falls, he said.[3]
In a final push before the country heads to a parliamentary election on Sunday and Monday, the government wants to convince unions to resuscitate the deal. "The work done in these days has been geared to creating a second chance so that a deal can be concluded," Economy Undersecretary Enrico Letta told the unions.[7] "We are working to make it possible to reach a preliminary accord next week," government under-secretary Enrico Letta told a news conference after a meeting with the unions.[4] The unions will be asked next week to approve new proposals, the government said in a statement, pledging an "active role" in the effort.[4]
As the government met with the unions on Thursday, hundreds of Alitalia workers staged a protest outside parliament in Rome, the ANSA news agency reported.[4] As government and union officials met at the prime minister's office, around 500 Alitalia workers protested outside parliament next door.[7]
The offer, which values Alitalia at 139 million euros ($216 million), is conditional on approval by Alitalia's strike-prone unions.[2] Labor leaders have opposed plans to lay off more than 2,000 Alitalia employees, close the cargo unit and downgrade Milan's Malpensa airport from a hub. Analysts say that Alitalia, which has been losing 1 million euros ($1.6 million) a day and selling assets to stay afloat, could only keep operating until June on its own resources.[2]
Letta later said in a statement the term "persuading" had not been used at the meeting but did not deny the government would present a plan. [7] The new meeting will take place after Italy holds general elections on Sunday and Monday, with a new government to take office in mid-May at the earliest.[4]
Leaders of the center-right coalition favored to triumph in this weekend's elections have toned down their opposition to a merger and appear willing to negotiate. "We are aware that this is a last attempt and we hope that it gives good results.We are convinced that a deal is within reach," Enrico Letta, undersecretary for outgoing Prime Minister Romano Prodi, said in comments cited by Dow Jones.[8] La Stampa quoted the likely future economic minister, Giulio Tremonti, as saying that "if there is the possibility of a merger that takes into account the value of the Italian market, with a strong tourism, then let's press ahead with an accord with Paris," according to Thomson Financial. He said Silvio Berlusconi, in line to become prime minister, "also agrees with this," although Berlusconi reportedly continues to try to form a coalition of Italian investors to bid for the airline.[8] The content on this site, including news, quotes, data and other information, is provided by Thomson Financial News and its third party content providers for your personal information only, and neither Thomson Financial News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.[3]
With the airline running out of time to stay afloat, Alitalia workers demonstrated in Rome, throwing a large model plane into the city's famous Trevi Fountain. [1]
SOURCES
1. EuroNews EuroNews : Italian government tries to revive Alitalia takeover talks
2. Italy says Alitalia sale only solution
3. Alitalia risks licence suspension in 2-3 weeks if no Air France deal - regulator - Forbes.com
4. AFP: Rome to play 'active role' to woo Air France back to Alitalia talks
5. Italian government tries to bring Air France back to the table
6. Italy govt ready to help conclude Alitalia deal | Industries | Industrials, Materials & Utilities | Reuters
7. Italy says Air France still Alitalia's only hope | Deals | Reuters
8. ATW: Present, future Italian governments not giving up on AF-KLM
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