Alitalia reviews its options after Air France-KLM drop takeover bid
Alitalia's board of directors met Thursday to review the failing airline's options after Air France-KLM abandoned a bid to take over the Italian flagship.
ROME, April 4, 2008 - Alitalia's board of directors met Thursday to review the failing airline's options after Air France-KLM abandoned a bid to take over the Italian flagship and its chairman Maurizio Prato resigned.
Plunging into the unknown, with painful bankruptcy proceedings the most
likely outcome, the board was meeting without chairman Prato, who resigned on
Wednesday after talks broke down between Air France-KLM and Alitalia's unions.
The Italian government, which wants to sell its 49.9 percent stake in the
airline, said after an emergency meeting on Thursday that it would try to
determine whether any chance of an agreement remains with the European giant.
Some 300 Alitalia workers expressed their dismay at the turn of events,
staging a sit-in outside the airline's headquarters in support of the Air
France-KLM proposals, the ANSA news agency reported.
Prato, named in August 2007, agreed with the basic elements of Air
France-KLM's proposed deal for the takeover and had repeatedly hinted that he
would step down if a deal was not reached.
The unions on Wednesday asked Air France-KLM to maintain all of the
company's activities, while the Franco-Dutch group planned to close the cargo
service and part of the ground maintenance unit AZ Servizi.
Air France-KLM boss Jean-Cyril Spinetta said the counter-proposals
reintroduced a long-discarded framework, going "beyond my mandate, so I have
to refer them to my board of directors."
The European giant had said it wanted all the unions to agree to the
takeover plan before it went forward.
In the end, Alitalia boss Prato was quoted as telling the unions that the
company is "cursed and only an exorcist could save it."
On Wednesday, Economy Minister Tommaso Padoa-Schioppa warned that in the
absence of a deal with Air France-KLM, Alitalia would likely undergo
bankruptcy proceedings similar to those that allowed the Parmalat food group
to restructure and downsize following its 2003 corruption scandal.
Administration would be much more painful than the proposed takeover,
The unions were reportedly seeking a meeting with the government.
Union leader Raffaelle Bonanni, in an interview with the newspaper La
Stampa, urged Prodi to persuade Spinetta to "come back to the table and
Air France-KLM shares, which have risen by about 18 percent in two and a
half weeks since the Alitalia board approved the takeover, were showing a gain
of 3.49 percent to 19.55 euros on Thursday.
French brokers Oddo Securities wondered in a note to clients: "Is this the
end of the Alitalia file or a means of putting pressure on the unions?"
The situation is complicated by the approach of general elections in 10
Centre-left leader Walter Veltroni called on the government "to remind all
the parties of their responsibilities, the unions and Air France, to find an
agreement that will avoid very hard impacts on jobs."
For his part, centre-right leader Silvio Berlusconi, who has repeatedly
called for an all-Italian alternative, has been silent since the talks
Meanwhile, Alitalia is losing about one million euros (1.6 million dollars)
a day and to help stanch the bleeding it has slashed some two-thirds of its
operations at northern Milan's Malpensa airport.
As of the end of February, Alitalia said it had 180 million euros in the
bank but in March it found another 148 million through tax credits and by
selling its two percent stake in Air France.