New twist to Alitalia story on account of police raids

Alitalia's rescue may not be in sight yet, but there is a new twist to the story of how Alitalia may about to be liquidated.

A report in The Guardian talks about a raid mounted by Italy's revenue guard on the headquarters of Alitalia in Rome, to seize a decade worth of the airlines' accounting records. The report said that the raid was conducted at the behest of prosecutors investigating the airline's collapse, as part of an inquiry that was opened after Alitalia filed for bankruptcy at the end of August. 

The inquiry is based on a petition by a consumer association named Codacons, representing shareholders and employees of the beleaguered airline, connected to allegations about illegal state aid.

Italian media reports suggest that no one has been placed under suspicion thus far. Simultaneous to the police operation, government ministers, union leaders and the officials of the investor group planning to buy the airline were still struggling to come to an agreement. 

The president of Codacons, Carlo Rienzi, was pleased about the raid being carried out, saying that now the investigation would progress and the responsibilities and names of ''those who have brought about, or contributed to, the wrecking of Alitalia'' can be determined and made public.

Recent reports indicated that the Italian government has made some progress over the weekend in brokering a deal that could avert an impending bankruptcy at the national flag carrier. It was earlier reported that Alitalia had only a few more operational days ahead of it as its cash dried up and that the airline may have to ground flights since suppliers would cut off its supplies of jet fuel.

Sources say that some signs of flexibility have come forth on the part of Alitalia's pilots, indicating the possibility of a deal that would avoid the government appointed administrator Augusto Fantozzi from proceeding to liquidate its assets. Sources say that the pilot's union seems to be more open to some vital concessions that it was before, during the earlier round of talks with investor group CAI. 

Italian prime minister Silvio Berlusconi urged Alitalia's labour unions to accept restructuring plans proposed by Italian investment group CAI, saying there was no other alternative before the flag carrier. He even accepted the possibility of a merger with either Air France-KLM or Lufthansa in the future.

"There truly is no alternative" to the CAI plan, he said. "The alternative is [Alitalia's] failure."