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Alitalia gets last-minute rescue EU rules warning on Alitalia deal
(1 day later)
An Italian investors' group has said it will go ahead with a rescue offer for the airline Alitalia, despite the lack of agreement with some trade unions. The rescue deal for the Italian airline Alitalia must not breach European Union competition rules, the carrier's bankruptcy administrator has warned.
The group, the Cai, said it had made a binding offer - shortly after walking out of negotiations over the airline. An investment group, the Cai, made an offer of 1bn euros ($1.27bn; £789m) for Alitalia on Friday, despite the lack of agreement with some unions.
Talks had earlier broken down because only four out of Alitalia's nine unions had agreed to the Cai's terms. About 3,000 workers will lose their jobs under the rescue plan.
The Cai hopes to link Alitalia with a major European airline, but a decision is not expected for several weeks.
Air France-KLM, Lufthansa and British Airways have all been courted as possible partners for Alitalia.
The rescue offer from the Compagnia Aerea Italiana (Cai), came after lengthy talks with Alitalia's trade unions, which broke down on several occasions.
Under the deal, 12,500 workers jobs will be saved, but 3,500 jobs will go, as well as some aircraft and some unprofitable routes.
Bankruptcy risk
Alitalia's bankruptcy administrator, Augusto Fantozzi, will study the offer this week, but has said any deal must not violate European Union competition rules.
The unions had accepted Cai's takeover of Alitalia in principle - but the airline's pilot and flight staff unions have not agreed to the Cai's detailed terms.
The Cai had set a Friday night deadline for a deal to be reached over securing Alitalia's future.The Cai had set a Friday night deadline for a deal to be reached over securing Alitalia's future.
Without a binding rescue offer, Alitalia would have been forced to seek new funding within weeks to keep itself going - or risk bankruptcy.Without a binding rescue offer, Alitalia would have been forced to seek new funding within weeks to keep itself going - or risk bankruptcy.
The investors, the Compagnia Aerea Italiana (Cai), have been holding lengthy talks with Alitalia's trade unions over job cuts and other savings. The negotiations were chaired by Gianni Letta, a senior aide to Prime Minister Silvio Berlusconi - the Italian government was keen for a deal to be reached.
The unions had accepted Cai's takeover of Alitalia in principle - but the airline's pilot and flight staff unions have not agreed to the Cai's detailed terms. Keeping Alitalia alive was one of the main election planks on which Mr Berlusconi ran for office in April.
Advertisement Long decline
Talks to save Alitalia The Italian government has since rewritten the bankruptcy laws to pave the way for a bail-out by the Cai consortium.
Bankruptcy risk Alitalia is one of the best-known names in global commercial aviation, and the airline has been in business since 1946.
The Cai group's earlier decision to walk away from the talks was the second time it had pulled back from making a bid, threatening the future of the cash-strapped carrier. It symbolised Italy's economic recovery after the war, becoming the world's seventh largest airline in the 1970s, before beginning a long decline, which has grown steeper in recent years.
During the lengthy talks, both sides accused the other of being inflexible. Although the Italian government sank 4.5bn euros into the airline between 1998 and 2005, it continued to lose money.
The Cai had always stressed that union backing was a pre-requisite for making a binding offer. Attempts to rescue Alitalia have been going on for two years Alitalia filed for bankruptcy in August after dodging the move for years as it battled with frequent strikes, rising oil prices, and political interference.
The group has pledged to inject more than 1bn euros ($1.27bn; £789m) into Alitalia and merge it with Italy's much smaller Air One airline.
"Everything is ready as far as Cai is concerned to complete a very difficult rescue," said Corrado Passera, the CEO of the Italian bank Intesa Sanpaolo, which helped draft the rescue plan.
The negotiations have been chaired by Gianni Letta, a senior aide to Prime Minister Silvio Berlusconi.
Mr Letta had warned the unions that the only alternative to the deal for Alitalia would be bankruptcy.
Keeping Alitalia alive was one of the main election planks on which Mr Berlusconi ran for office in April, and his government has since rewritten the bankruptcy laws to pave the way for a bail-out by the Cai consortium.