It will be very difficult for Air France-KLM to take over Alitalia and save the Italian carrier without union approval and support, the chairman of the Franco-Dutch carrier, Jean Cyril Spinetta, said on Wednesday.
Speaking a day after unions rejected the conditions of Air France-KLM's offer, Spinetta observed that ''in my 15 years in the air transport sector I have never seen an airline overcome its difficulties without the support of its employees. For me having the express support of a majority of employees is essential''.
Alitalia's unions rejected the takeover offer because of the high number of layoffs, the March 31 deadline Spinetta has set for them to approve or reject his plan and his apparent unwillingness to negotiate the terms of the agreement with the union.
Speaking to the press after a day of talks with government and Alitalia officials, Spinetti said ''we are talking about an offer which has already been accepted by both boards and the economy ministry. Everyone knows that the margins for negotiation are non-existent or at most extremely limited''.
Turning his attention to the question of layoffs, the Air France-KLM chief explained that they will total 2,100, of which 1,600 will be from Alitalia's flight division AZ Fly (pilots, cabin crew and ground staff) and 500 from the 3,300 employees of AZ Servizi, the division which handles maintenance and other ground activities.
These layoffs, Spinetta said, will be handled ''in an exemplary way involving all social resources and financial incentives possible''.
Should the takeover operation succeed, he added, ''Alitalia will have a progressive labor policy, with a normal salary system as opposed to the current one in which salaries are frozen''.
''I understand that unions need time to evaluate our plan in full. It is my hope that we can resume dialogue as soon as possible in order to win their support,'' Spinetta said.
Aside from the layoffs, unions have also rejected Air France-KLM's plan to end Alitalia's cargo activities.
Spinetta explained to the press that the plan was to reduce service between 2008 and 2010, grounding three out of five planes, ''to allow us time to find an adequate financial solution''.
''I am ready to bet on the success of the merger. We do not want to downsize Alitalia. On the contrary, we want to give it the ways and means to recover and expand. And the best demonstration of this is the one billion euros we intend to inject into its capital,'' the Air France-KLM chief said.
Earlier in the day Spinetta admitted that the whole operation was at risk of falling through.
Nevertheless, the Air France-KLM chief added he was still ''confident'' that a compromise could be reached.
After his meeting with unions on Tuesday, Spinetta was reported to have told them Air France-KLM was not ''obliged'' to buy Alitalia.
Economy Minister Tommaso Padioa-Schioppa on Wednesday warned that if the deal fell through this could lead to the Italian carrier being placed into receivership.
This came after he was reported to have had a ''heated argument'' over Alitalia with left-wing ministers during a morning cabinet meeting.
The minister, who is responsible for the Treasury's 49.9% controlling stake in Alitalia, met Wednesday for almost two hours with Spinetta, Alitalia CEO Maurizio Prato and representatives from Fintecna - the state holding company which has a 49% stake in AZ Servizi - to examine ways to overcome union resistance to the takeover plan.
Alitalia has called an ''urgent meeting'' with unions for Thursday morning which will also see the participation of Fintecna top brass.
It is not known whether Air France-KLM will be represented at the 9am meeting.
The Alitalia board will then meet Thursday afternoon and a statement will be released on the state of the air France-KLM offer.
Speaking on Wednesday, the head of Italy's biggest trade union CGIL, Guglielmo Epifani, denied that unions were being irresponsible for blocking the sale of Alitalia.
''We know that the situation at Alitalia is critical and no one wants to see it go bankrupt. However, we cannot accept a plan which does not convince us and, above all, involves thousands of people losing their jobs''.
In its offer, Air France-KLM said it was ready to pay 10 euro cents a share for 100% of Alitalia, through a 160-to-one share swap, and buy Alitalia's outstanding convertible bonds at a price of 0.3145 euros each.
The plan also calls for boosting the airline's capital by one billion euros, extending a 300-million-euro stop-gap loan and investing 850 million euros between 2008 and 2010, for a total expenditure of 1.7 billion euros.
