Alitalia: Berlusconi still sees Italian solution

| Thu, 04/17/2008 - 04:21

Premier-to-be Silvio Berlusconi on Wednesday again floated the prospect of an all-Italian rescue plan for Alitalia while leaving the door open to a tie-up between the struggling flag carrier and Air France-KLM.

The centre-right leader, who won a third term in power in Italy's weekend general election, said at a press conference that it ''would not be difficult'' to find an Italian consortium to save Alitalia.

He also said he had coined a 'Save Alitalia' slogan: Amo l'Italia, Volo Alitalia (I Love Italy, I Fly Alitalia).

Berlusconi told a TV talk show aired on Tuesday night that ''many important businessmen have come forward who have guaranteed their commitment to ensuring that Alitalia remains Italian''.

He said the offer would become concrete over the next month but gave no details of the bidders involved.

The billionaire media tycoon made the future of Alitalia a key point of his election campaign, saying back in March that an Italian consortium was ready to fend off an Air France-KLM takeover.

He repeatedly said he would not allow the Treasury's 49.9% share in the airline to fall into foreign hands, accusing Air France of ''colonialism'' and even saying at one point that his own children were willing to join a rescue consortium, a statement he later backed down on.

Not one of the parties he cited, which included Benetton, Eni and Mediobanca, confirmed an interest.

The outgoing government of centre-left Premier Romano Prodi has been trying to sell the state's stake in Alitalia for more than a year in order to save it from bankruptcy.

Alitalia has debts of around 1.5 billion euros and is losing some one million euros a day.

A recent deal to offload the company to Air France-KLM fell apart when the carrier's nine unions refused to accept 2,100 layoffs and the downsizing of the airline's activities.

Air France-KLM Chairman Jean Cyril Spinetta began direct negotiations with Alitalia unions last month but threw in the towel at the start of April after the unions presented a counterproposal which he described as ''unacceptable''.

Prodi has been working to revive the negotiations, maintaining the only alternative to a deal with the Franco-Dutch buyer is receivership.

The outgoing government accused Berlusconi of campaign rhetoric when he said Italian businesses were ready to step in, challenging him to come up with firm details.

Critics also accused Berlusconi of jeopardising the Air France-KLM talks and pushing Alitalia closer to bankruptcy.

Unions, meanwhile, have expressed willingness to return to the negotiating table with Air France-KLM.

Berlusconi said on Wednesday that ''there is another possibility and that is returning to the initial solution of forming a large international group based on the equal dignity of three airlines, Alitalia, KLM and Air France''.

He said that in that case, ''the flag carrier would remain our flag carrier and it would be an important alliance''.

But another potential sticking point is the future of Milan airport Malpensa, previously Alitalia's second hub.

The Air France-KLM plan to revive Alitalia involves downsizing Malpensa and focusing on the Rome hub of Fiumicino.

Alitalia has already begun downscaling its Malpensa operations, cutting two-thirds of its flights from the airpot and shifting international and intercontinental services to Rome.

But Berlusconi said on Wednesday that he wanted Malpensa to remain a strong hub.

This is a vital issue for a key Berlusconi ally, the devolutionist Northern League, which is insisting that the north be served by an important hub.

League heavyweight Roberto Maroni, whose party will be the third biggest in the new parliament after almost doubling its votes, said on Wednesday: ''We will do everything needed to prevent Alitalia going bankrupt and to relaunch Malpensa''.

The League is also fiercely opposed to the idea of Alitalia being sold to a foreign bidder.

Alitalia shares rose 1.69% on Wednesday to close at 0.6 euros.

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