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The Alitalia saga continues.....

I'm tired about thinking about my wasteful spending on aged balsamic vinegar that I can't even really appreciate. So, I'll turn back to the soap opera that is the Alitalia airline story -- maybe it will have a happy ending!

Although it's not looking that way just yet. News agency ANSA reported today that Air France-KLM have promised to try to sooth some of the union fears that could prevent the takeover/merger of Alitalia.

It seems that Air France-KLM plans to make a new offer for Alitalia on Friday that would include some new job prospects at the larger airline for pilots now employed by the Italian airline.

The president of Air France-KLM, Jean-Cyril Spinetta, is to meet with heads of the airline unions to present a plan that he described as ''solid, very precise and very detailed,'' according to ANSA.

The plan includes the transfer of 60 Alitalia pilots to Air France every year between 2008 and 2010 to reduce layoffs resulting from the takeover. Spinetta also said he was prepared to continue discussions beyond the deadline of March 31 to approve or reject the merger following union requests, says ANSA.

But one union is sceptical. The new proposal doesn't mean the layoff issues have been resolved, said Massimo Notaro of the Alitalia pilots union. He suggested pilots will be waiting to see the details of the new offer and whether it really will guarantee new jobs for pilots, or if Air France-KLM simply would steer pilots into the same job application process as any other pilot.

"If the offer is for young pilots who speak French, who decide to transfer, and who have to go through the selection process for Air France from scratch, then it's something our pilots could do on their own - it's not a concession,'' he said.

Unions have been opposed to the Air France-KLM deal, insisting that an estimated 2,100 layoffs and new timetables must be re-negotiated. Their opposition isn't the only threat to the deal, which observers say is necessary to save Alitalia.

Last week centre-right leader Silvio Berlusconi branded the Air-France KLM offer as ''arrogant and unacceptable'' and called on Italian businessmen and banks to join and buy the troubled carrier.

Easier said than done.

Italy's biggest private carrier, Air One, with financial backing from Banca Intesa, lost out to Air France-KLM in December in the fight for the Italian Treasury's 49.9% controlling stake in the national carrier.

After trying and failing in court to stop the Alitalia-Air France-KLM talks, Air One promised to present a new offer. However, that hasn't happened.

And last week, Economy Minister Tommaso Padoa-Schioppa warned that if the Air France-KLM offer did not win approval, the only alternative would be to place Alitalia in receivership.

According to ANSA, many 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 stop accumulating debts, which it currently does at about a million euros a day. To do this would require spending cuts in four key areas: leasing aircraft, buying fuel, insurance and salaries.

There are concerns that reducing leasing and fuel costs would ground 50 out of the 174 planes Alitalia currently operates, eight more than the reduction envisioned in the Air France-KLM plan.

This in turn would force a drastic reduction in staff, some 3,000 pilots and cabin crew and another 2,000 ground service and maintenance staff for a total of 5,000, more than double the 2,100 layoffs contained in the Air France-KLM plan.

Alitalia would then be put up for liquidation and its assets, including planes, routes and slots, sold to help pay off the airline's 1.4 billion euros debt.

Comments (1)

I wonder what will happen to all the people that are holding tickets for future flights? I think my friends of friends that I wrote about earlier doing that landing in Rome, 2 days Venice, 4 days Cinque Terre, 1 day Rome are flying Alitalia this summer. I wonder if they even know what is going on.

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