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Consortium withdraws Alitalia bid Consortium withdraws Alitalia bid
(21 minutes later)
The business consortium proposing to rescue Italian airline Alitalia has withdrawn its offer in the face of union opposition. A consortium of investors proposing to rescue airline Alitalia has withdrawn its takeover offer, raising fears the carrier may go into liquidation.
The CAI consortium had given the nine unions until 1400GMT to accept the deal, but not all of the unions agreed with the terms of the offer. The Italian group, called CAI, dropped its bid after unions failed to back the deal before a 1400GMT deadline.
Five of the unions had said they were opposed to the CAI proposal because it would involve 3,000 job cuts. While four of Alitalia's unions had supported the deal, five had objected because of plans to cut 3,000 jobs.
There are now fears Alitalia could go into liquidation. Italy's flag-carrier has already warned that it is running out of funds to buy all the aviation fuel it needs.
It has already warned that it is running out of funds to buy aviation fuel.
Cancelled flightsCancelled flights
Italian Labour Minister Maurizio Sacconi said before the deadline that the future of Alitalia was "hanging by a thread".Italian Labour Minister Maurizio Sacconi said before the deadline that the future of Alitalia was "hanging by a thread".
While Italy's four main union organisations - CGIL, CISL, UIL and UGL - had signed up to the agreement with the CAI consortium, five other unions had rejected the deal as "useless and provocative". While Italy's four main union organisations - CGIL, CISL, UIL and UGL - had signed up to the agreement with the CAI, five other unions had rejected the deal as "useless and provocative".
Those opposed to the package - SDL, ANPAC, UP, ANPAV and Avia - include pilots and cabin crews.Those opposed to the package - SDL, ANPAC, UP, ANPAV and Avia - include pilots and cabin crews.
Their protests forced Alitalia, which is losing 2.1m euros ($3m; £1.7m) daily, to cancel 40 flights on Wednesday.Their protests forced Alitalia, which is losing 2.1m euros ($3m; £1.7m) daily, to cancel 40 flights on Wednesday.
Under the CAI rescue proposal, the Italian consortium had put forward a 1bn-euro offer for the airline.Under the CAI rescue proposal, the Italian consortium had put forward a 1bn-euro offer for the airline.
It wanted Alitalia to merge with Air One, the country's second-largest airline, while its 1.2bn-euro debt would be absorbed by a second firm, which would then be liquidated.It wanted Alitalia to merge with Air One, the country's second-largest airline, while its 1.2bn-euro debt would be absorbed by a second firm, which would then be liquidated.
Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia, in which the Italian government holds a 49.9% stake.Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia, in which the Italian government holds a 49.9% stake.
In April, plans for the airline to be taken over by France-KLM collapsed when unions refused the accept the terms of the deal.In April, plans for the airline to be taken over by France-KLM collapsed when unions refused the accept the terms of the deal.
Alitalia suspended trading in its shares in June and filed for bankruptcy protection last month.Alitalia suspended trading in its shares in June and filed for bankruptcy protection last month.