Clock ticking for Alitalia to lose licence in less than a week
23 Sep 2008
Vito Riggio, the head of the Italian aviation authority ENAC has said that Alitalia's licence to fly could well come to an end within three or four days, according to a report in the Dow Jones.
Riggio said this in a radio interview, saying that that without a credible financial plan Alitalia's temporary licence to fly will be withdrawn.
Alitalia's bankruptcy protection request is a necessary part of the rescue plan devised by Italian banking giant Intesa Sanpaolo, which was given the mandate by the Italian government to act as an advisor for Alitalia. In its advisory capacity, Intesa said that the carrier should be split in two, with the potentially profitable assets being sold to a new company that would be formed by a consortium of Italian investors.
The Italian investor group, Compagnia Aerea Italiana (CAI) had withdrawn its offer for the national flag carrier, Alitalia SpA, after six of Alitalia's nine unions failed to approve the ressurection plan put forth by Intesa Sanpaolo and backed by CAI.
In April this year, Alitalia's flight path to potential recovery took a nosedive as long time suitor, Air France-KLM Group, called it quits after talks with the airline's trade unions failed inspite of a two-day extension to the negotiations. The pull out by the group came despite its bid having being accepted by the outgoing government of Alessandro Prodi.
Out going prime minister Romano Prodi, who had extended his full support to the deal before he stepped down as the country's premier to face elections said. ''I hope good sense will prevail and the negotiations can resume.''
The failure to sell Alitalia to Italian investors would be a substantial setback for Berlusconi's government. Berlusconi had aided in scuttling the Air France – KLM offer, which had been negotiated by the previous government. He had called the offer ''arrogant'', while insisting that he could find an Italian buyer. The Alitalia's crisis could dog his government, as it is fuelling tensions with unions. His previous government faced six general strikes in five years.
Members of the opposition have been expressing their disgust, saying that the scuttling of the deal with Air France – KLM was ''true political sabotage'', the negative consequences of which are now being played out.'
After taking over the reigns of the government in May 2008, Berlusconi government had appointed banking and financial services group Intesa Sanpaolo SpA to draft a rescue plan and find investors in Alitalia.
Government-appointed bankruptcy commissioner Augusto Fanztozzi will now have to decide on how to shut down the airline. He will start inviting national and international offers for cash-strapped Alitalia shortly, reports in the media indicated.
Fantozzi has made an open plea for an investment plan to rescue the failing airline. He called upon "anyone" who could "assure continuity of the air transport service in the medium term" to make a bid on all or part of the carrier by 30 September.
However, it is most likely that ENAC's warning will become a reality before the end of the month.
Reports indicate that Alitalia's assets are under scrutiny from at least one company already, the AMA Asset Management Advisor, a Swiss investment firm. It had said a day ago that it would be interested in acquiring or leasing a combined 30 MD-82s and ATR-72s owned by Alitalia to operate flights from Italy to Eastern Europe.
