Alitalia puts itself up for sale on internet, newspapers

Tuesday, September 23, 2008, 9:26 by Aviation Correspondent

Alitalia, the flag-carrier airline of Italy, has posted on the company’s website an invitation calling for bids from investors before September 30, 2008, in a last-ditch attempt to rescue the troubled airline.

Similar advertisements are also being placed in the Italian and international newspapers.

The news agency ANSA quoted Augusto Fantozzi, Alitalia’s administrator, as saying: “We are going to make a public tender (for offers). That will formalise what I have been doing for a long time. I continue to sound out the market. So far, no offer has come through.”

The advertisement comes after the Italian consortium Italian Air Company (CAI) withdrew a 1-billion-euro ($1.4 billion) offer to take over the airline following opposition by some workers unions. The CAI pulled out after six of Alitalia’s nine trade unions rejected a deal that involved eliminating 3,250 jobs.

The Italian newspaper Il Giornale went to the extent of terming the pilots and cabin crew who rejected the CAI consortium’s rescue offer “spoilt brats.”

ANPAC, the main union for Alitalia’s pilots and cabin crew, resents the CAI offer since the consortium intends to rewrite contracts allowing Italian members of the union to work an average of 100 hours less than the pilots and cabin crew working with British Airways, Air France or Lufthansa.

In April 2008, Air France-KLM had to withdraw its offer to buy Alitalia, again, after stiff opposition from some of the trade unions.

Italy’s Prime Minister Silvio Berlusconi, who wishes to keep Alitalia in Italian hands, has said that “there is no alternative to the offer, I just hope the unions come to their senses.”

Altero Matteoli, Minister for Transport, said in an interview to a business newspaper on September 21, 2008: “Without a deal, Alitalia flights could be grounded in less than a week.” He also warned that Alitalia’s licence could be withdrawn “in five or six days” and described the CAI consortium’s offer as “the only option” to save the company.

The near-bankrupt Alitalia, which has gone into administration, is at present being kept alive by a £300-million loan given to it by the Italian government earlier in 2008.

Alitalia, with its hub at Leonardo da Vinci Airport in Rome, Italy, continues to operate flights even as it struggles to prevent itself from going into liquidation.

A week ago, dozens of Alitalia flights were cancelled on two separate days, resulting in Italy’s national railway network reporting a big jump in ticket sales. On September 19, 2008, Eurostar pressed into service extra trains between Milan and Rome – one of the most profitable routes of Alitalia.

The Italian newspaper La Repubblica reported that, with Alitalia’s liquidity diminishing, the company faces closure which would, in turn, throw Italy’s transport system into chaos. The company will have only €30 million-€50 million left by the start of next week, it added.

If there are no new offers or any indication of an improvement in Alitalia’s financial condition, then Italy’s National Civil Aviation Authority (ENAC) will start an investigation into whether the carrier’s licence should be withdrawn.

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