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Alitalia up in the air again!

Well, at the risk of being sued by the news agency ANSA for plundering its website in search of blog items, I've pulled up another one that I finding really interesting and a bit troubling. But not surprising.

It seems there is still plenty of trouble ahead for the proposed deal that would see Air France and KLM made a formal bid to take over Italy's national carrier, Alitalia -- a deal would probably help to keep the troubled carrier alive.

ANSA reports that one serious sticking point is, of course, labour concerns about what conditions Air France-KLM would impose. No surprise there.

The other major hurdle is just what position the next Italian government will take on the proposed deal. According to the news agency, the Air France-KLM team is expected to present it formal bid for Alitalia on Friday. But it has also been reported that the Air France-KLM team will insist that to finalize the deal, it must have the approval of Italian unions and the support of whoever forms the new Italian government.

Both of those points could pose problems. ANSA says that observers believe that if drastic cuts are demanded as part of the deal, Italian unions will balk. Which is only to be expected. And on the political front, if the centre right coalition of former premier Silvio Berlusconi wins, as the polls seem to predict, the deal is threatened because Berlucsconi hasn't favoured the airline deal.

According to ANSA, that's because of strong opposition from the regionalist Northern League, a key center-right coalition partner, which doesn't want to see any downsizing of Milan's Malpensa airport -- something the airline group would want to do if it succeeds in taking over Alitalia.

As if all of this isn't enough -- and as if Alitalia employees and customers haven't been through enough -- ANSA reports that a key Berlusconi economic advisor has suggested that the national carrier should first be allowed to go bankrupt, then a new airline could be built from scratch, without the weight of current labor contracts.

A leading member of the Northern League, Roberto Calderoli, was also quoting as supporting that strategy, suggesting ''perhaps the best thing to do would be to pull the plug on Alitalia, let it die and then start again,'' which other national airlines have done.

Last December, Alitalia's board unanimously chose Air France-KLM's bid because it said it offered the best guarantees for the national carrier's future.

The Italian government of the day decided at the end of 2006 to sell most if not all of the Treasury's 49.9% stake in Alitalia.

After an attempt to auction the stake failed last summer, it was decided that Alitalia management would negotiate the direct sale of the Treasury's stake, with the government having the final word on the deal.

Comments (4)

Brenda:

Think how fabulous air travel would be if WE ran the world?
Great prices, super-comfortable seats, fabulous gourmet food...and no profit!
Ah, well....
Ciao ciao,
Brenda

It is because of stories like this that I will only use Alitalia to fly within Italy. I figure if the planes are grounded we can always either drive or take the train. LOL

Sandra:

Jerry, it really is too bad that Alitalia has been under such a dark cloud for so long.

Brenda, you're so right -- we could have a wonderful airline: Slow Air?

Ciao,ciao!

The problem with Alitalia is that the state is too involved in the business.

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