Alitalia divided over deal to save airline

September 15, 2008

, ROME, September 15 – Last-gasp negotiations to save Italy\’s flag carrier Alitalia resulted Monday in a draft deal signed by four out of nine unions, but the move sparked attacks from pilots and cabin crews.

Delegates of the four national union confederations representing Alitalia staff signed the deal with CAI, a consortium prepared to invest in a new revamped Italian airline, it was announced early Monday.

While the move allows Italian President Silvio Berlusconi to save face after his promise to produce an Italian rescue package, it does not yet remove the possibility of bankruptcy.

Employment Minister Maurizio Sacconi said it was "a solid base upon which to build a future for (our) national carrier."

Under the accord, the number of personnel employed by the new Alitalia will be 12,500 including 1,500 pilots, 3,300 cabin staff and 7,650 technicians, workers and managerial staff, ANSA news agency said.

CAI had previously offered to employ only 11,500 people, ANSA quoted the unions as saying.

The fate of around 1,000 call-centre staff in particular remained unclear Monday.

Last-ditch talks to save Alitalia had got under way Sunday, with prospective buyers, unions and the government struggling to agree on how to salvage the country\’s flag carrier.

But the accord shattered union solidarity, with five unions rejecting the deal in a statement as "useless and provocative."

The five — SDL, ANPAC, UP, ANPAV and Avia — had waited all evening and into the night to be called in to the meeting held at the labour ministry.

Meanwhile the four signatories — CGIL, CISL, UIL and UGL — were taking part in the talks with the would-be buyers.

The meeting wound up early Monday with approval of the draft deal laying out the industrial plan of the new company but avoiding the thorny problem of a single contract for all staff proposed by CAI.

That was to be addressed at a fresh meeting with unions starting at 0900 GMT Monday.

The deal was described by CISL Secretary-General Raffaele Bonnani as a "major first step to save Alitalia."

Under the latest rescue plan, the Italian consortium, which has put a one billion euro (1.4 billion dollar) offer for the troubled airline on the table, would ensure passenger flights keep running.

Alitalia would also merge with Air One, the country\’s second largest airline, and its 1.2 billion euro debt would be absorbed by a second company, which would then be liquidated.

Earlier meetings this weekend yielded small advances, according to daily La Repubblica, which reported that potential buyers increased their salary package for Alitalia employees by 100 million euros (140 million dollars).

Berlusconi, who has personally intervened in the talks, said Saturday that Alitalia\’s closure would be a "disaster for the entire country."

The company has been living on state-funded life support, with Italian investors and unions having failed to agree on the salary, vacation and contract demands outlined in the current takeover package.

Massimo Notaro, the head of one of Italy\’s two main pilot unions, UP, described Sunday as "completely unacceptable" a CAI forecast that 1,000 pilots might lose their jobs.

A proposed takeover of Alitalia by Air France-KLM fell apart in April when the French-based carrier — the world\’s third biggest — walked away from talks after unions rejected terms.

The Italian government owns 49.9 percent of Alitalia, which has been surviving on a state loan of 300 million euros made at the end of April.

Alitalia, a national symbol for Italians since it was founded in 1946, has lurched for years from crisis to crisis, and from restructuring plans to the latest takeover rescue scheme.

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