« I'll never understand Air Canada....... | Main | Why, oh why, did my cleaning lady dump me? »

Speaking of arrogant and unacceptable....

Well, it seems that Alitalia's future has again hit a serious patch of turbulence. This time it looks extremely bad. A story posted today on the ANSA news agency's website is titled: "Alitalia looks set for receivership/ Politics and unions dim hopes for merger with Air France-KLM."

According to the news agency, the proposed sale/ merger has hit more snaps, as both political bosses and unions are insisting they must be allowed to re-negotiate the terms of the tentative deal announced several months ago.

It seems that Silvio Berlusconi, the former (and disastrous) premier and now centre-right front-runner to again take the top political job has abandoned any pretense at neutrality, and has branded the Air France-KLM offer as ''arrogant and unacceptable''.

Berlusconi, who is the richest man in Italy according to an earlier report in ANSA, said Italian businessmen and banks should feel a ''sense of duty'' to join together to buy Alitalia. According to the ex-premier, the offer could be led by Italy's biggest private carrier Air One with the financial front coordinated by Banca Intesa, Italy's number two bank.

However Banca Intesa, like numerous other banks around the globe, is apparently caught up in concerns related to the global credit crunch and financial market upheaval that is following the subprime mortgage crisis in the United States. On Thursday, the Banca issued a statement to say that Alitalia was not on its agenda.

ANSA reports that according to Bank CEO Corrado Passera, Intesa has not been involved in any bid for Alitalia since December and, in responding to Berlusconi's statements, added ''we have never invested in something just because someone called on us to do so''.

Berlusconi also phoned outgoing Premier Romano Prodi urging him to approve a stop-gap or bridge loan from the state to allow time for an all-Italian offer to be drawn up and presented for Alitalia, according to ANSA. Prodi reportedly reminded Berlusconi that the European Union had made it clear that Alitalia could not receive fresh state aid unless the question of the carrier's future had been resolved with a concrete offer for the Treasury's stake.

ANSA quotes some unnamed observers as criticizing Berlusconi, accusing him of exploiting Alitalia's troubles for electoral purposes. These observers also suggest they don't believe that there is a credible Italian offer is on the horizon.

The Italian Treasury issued a statement on Thursday to warn against ''destroying an existing offer rather than creating a new one,'' says the ANSA report.

''Anyone interested in Alitalia should step forward with a formal and concrete offer. Time is running out and cannot be dictated by political agendas,'' the Treasury added.

Air One, with Intesa's backing, lost out to Air France-KLM in December as Alitalia's preferred talking partner in exclusive negotiations for the Treasury's 49.9% controlling stake in the national carrier.

After a failed court challenge to stop the Alitalia-Air France-KLM talks, Air One promised it would present a new offer. However, no such offer has been made.

Unions met Thursday morning with Alitalia's executives and repeated their opposition to the Air France-KLM plan unless layoffs and timetables could be re-negotiated.

The unions have reportedly said they would be willing to meet again with Air France-KLM management, even next week, but only if concessions from management were possible.

They also wanted Air France-KLM to extend its March 31 deadline for approving the merger and called on the government to extend a loan to Alitalia to allow it to continue to operate.

Unions also said that they would not be swayed by threats of placing Alitalia into receivership. Economy Minister Tommaso Padoa-Schioppa warned this week that if the Air France-KLM offer did not win approval the only alternative would be to place Alitalia in receivership.

ANSA reporters that unnamed observers believe that receivership would be much worse for Alitalia and its staff than merging with Air France-KLM.

Once in receivership, Alitalia would have to first have to stop accumulating debts, which it currently does at a rate of about 1 million euros a day. To meet this requirement, spending would have to be cut in four key areas: leasing aircraft, buying fuel, insurance and salaries.


Comments (4)

I don't think I will ever understand how decisions are made in Italy. Mind you, any Italian I ever spoke to said much the same thing.

Amy:

It's the classic shooting yourself in the foot, isn't it? Unbelievable.

Thanks for posting this. Berlusconi makes me so ANGRY!!

I wish that Alitalia would just go bankrupt. If Airfrance buys it it is going to be a pain in the a__ss for anyone travelling on airfrance and KLM.

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)