Representatives from Air France-KLM, including chairman Jean Cyril Spinetta, have a critical meeting with Alitalia unions on Tuesday to try and convince them to accept their takeover offer for the Italian carrier.
The French-Dutch offer has already receive green lights from the Alitalia board, the Treasury - which holds the 49.9% stake in the airline up for sale - and the outgoing government of Premier Romano Prodi.
However, Air France-KLM has hinged its formal offer on it winning union support, no easy task given the number of jobs cuts involved in a future merger.
Alitalia unions have already made it clear that they will not rubber stamp the bid and want assurances from Air France-KLM that the offer is still open to negotiation.
Unions are also concerned over the fate of Alitalia's ground and maintenance activities run by AZ Servizi, an Alitalia division in which the state holding company Fintecna holds a 49% stake.
Air France-KLM has said it only intends to acquire a minor interest in AZ Servizi, guaranteeing jobs for only 25% of its work force of some 8,000.
On his way into the talks, one union leader said: ''Let's hope this doesn't end in a tragedy. Right now it (the offer) seems like a no-win solution, especially in regard to jobs''.
''If there is room for negotiation, we're ready to talk. We will not accept a 'take it or leave it' offer,'' the union official added.
In the event that unions do give a green light to the merger, the offer may still run aground over a 1.25-billion-euro suit filed against Alitalia by the company which manages Malpensa airport, SEA, over the carrier's decision to drastically cut back service at the Milan airport.
According to SEA, by downsizing Malpena's role Alitalia had violated a 2002 partnership agreement between the two to make the Milan airport Italy's second hub after Rome.
The Italian government on Tuesday reached an agreement with SEA, the Lombardy government and unions to compensate workers at Malpensa who became redundant because of Alitalia's cutbacks at the Milan airport.
After announcing the accord the government asked SEA to drop its suit in the interest of saving Alitalia. However, SEA has yet to respond to the request.
Aside from the unions, political forces are also unhappy over the final draft of Air France-KLM's offer, which fell below previous expectations
From an economic standpoint, the final offer gave a lower value to Alitalia shares in view of a share-swap operation: 10 euro cents instead of a previous calculation of over 30 cents.
This sent Alitalia shares into a tailspin on the Milan stock exchange where they plummeted 27% on Monday and tumbled an additional 20% on Tuesday.
Although the Italian government has left the door open to counter offers for Alitalia, most observers see this as unlikely and believe that the alternative to selling Alitalia to Air France-KLM would be bankruptcy, given that the airline already has around 1.3 billion euros in net debt and is losing some one million euros a day.
Some economists have gone so far as to suggest letting the national carrier go bankrupt, after which a new airline could be built from scratch without the weight of current labor contracts.
This was the strategy followed by national carriers Sabena of Belgium and Swissair, which after collapsing were restructured and then sold to the private sector.
However, should Italy accept the Air France-KLM offer, the Treasury would retain an investment in Europe's biggest airline, with a representative on the carrier's board and the Alitalia brand and logo would remain intact.
