Air France, Alitalia set for talks with unions on takeover

18th March 2008, Comments 0 comments

Air France-KLM and Alitalia were to hold talks Tuesday with unions at the Italian flag carrier after Rome approved a takeover

   ROME, March 19, 2008 - Air France-KLM and Alitalia were to hold talks
Tuesday with unions at the Italian flag carrier after Rome approved a takeover
by the French-Dutch airline and a protester was hurt in a clash with police.
   Air France-KLM boss Jean-Cyril Spinetta was to go into talks at 3:00 pm
(1400 GMT) with union leaders after they reiterated objections to the takeover
bid, in particular to plans to scrap Alitalia freight operations and break up
the maintenance unit.
   A demonstator in a crowd of some 300 protesting outside Alitalia's Rome
headquarters was hurt in a confrontation with police, the ANSA news agency
   Police were trying to prevent a group demonstrators from entering the
building, ANSA said.
   The outgoing Italian government of centre-left leader Romano Prodi, which
owns 49.9 percent of the financially strapped Italian national carrier, on
Monday approved the acquisition through a share swap of one Air France-KLM
share for every 160 Alitalia shares.
   The result would value the Italian airline at 140 million euros (218
million dollars).
   About 1,600 out of 11,000 jobs are to be lost overall under the takeover
   The secretary general of the CISL union, Rafaelle Bonanni, slammed the
behaviour of the Prodi government as "absolutely detestable," warning that it
would lead to 7,000 job suppressions.
   "They did everything in secret, alone, and at the last minute they want to
unload the decision onto our shoulders," he said on Italian television.
   Alitalia's main union CGIL demanded "negotiating leeway" on the takeover
while threatening to use its veto.
   "We have the ability to take a clear responsibility, a 'yes' or a 'no,'
with all the consequences that that entails," warned CGIL secretary general
Guglielmo Epifani.
   Even the pilots' union ANPAC, which has agreed to the takeover in
principle, called the French-Dutch offer "unacceptable."
   The pilots are especially worried about the plan to scrap the freight
service from 2010.
   The new Alitalia would keep its Italian identity as well as its own brand
and logo.
   The government's green light for the deal, which was expected, followed the
airline's acceptance of the Air France-KLM offer at the weekend.
   But the two suitors are seeking an agreement with the unions by March 31.
   The city of Milan, for its part, is unhappy about huge cutbacks planned for
Alitalia at Malpensa airport.
   Mayor Letizia Moratti said in an interview published on Tuesday that the
city wanted direct compensation in exchange for dropping a lawsuit over the
   "Alitalia has dropped its commitment to make Malpensa its hub," she told
the daily La Repubblica, adding that it would be "unthinkable" for the city to
accept the cutbacks without some form of compensation.
   "If there is goodwill on all sides, I am prepared to open negotiations for
a settlement on condition that fair compensation is awarded," the right-wing
mayor said.
   SEA, the company that manages Milan's three airports and is controlled by
the city, was planning to seek 1.25 billion euros (1.97 billion dollars) in
view of the cutbacks to be implemented next month.
   Even before the sale, Alitalia had announced plans to cancel several
unprofitable routes in and out of Malpensa beginning in late March.
   Long-haul routes, costing the airline some 200 million euros (300 million
dollars) a year, will be slashed from 17 to just three -- New York, Sao Paulo
and Tokyo.


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