labels: News reports, Airlines
Alitalia acquisition 'at risk': Air France-KLM chief news
20 March 2008

Rome: Air France (AF)-KLM chief, Jean-Cyril Spinetta, has said that though the carrier has the approval of the Italian ministry of economy and finance for its bid for Alitalia, the road ahead may be difficult as a majority of trade unions, and a future government, still have to approve the deal.

"The deal is at risk. But I still have hope," he said. "Everyone knows that the margin for maneuver to improve the plan is nonexistent or extremely limited."

AF-KLM has set 31 March as a deadline for certain conditions to met if it is to proceed with the deal, including dismissal of a lawsuit by Milan airports operator, SEA. Consent of Alitalia's trade unions is critical as well for AF-KLM's plans to revive a near-bankrupt Alitalia.

"If there is not this support, it would be very difficult for AF-KLM to commit itself to a very difficult economic operation," Spinetta said.

Talks between unions representing Alitalia employees and AF-KLM broke off after the unions rejected AF-KLM plans to slash 1,600 jobs from Alitalia's 11,000-strong work force.

"The AF-KLM group is not here to buy Alitalia but to see if it is possible, with the personnel of Alitalia, to take part in the creation of a major group with a global reach," Spinetta told union leaders.

"With your contribution, Alitalia will be able to restore its profitability."

Spinetta reportedly warned earlier that his company could walk away from the deal, accepted Monday by the Italian government. "We are certainly not obliged to acquire Alitalia," Spinetta said.

Italy's outgoing centre-left government on Monday approved the acquisition which involves a share swap of one AF-KLM share for every 160 Alitalia shares, valuing the Italian airline at $219.44 million.

The Italian state owns 49.9 percent of Alitalia.

By way of a sop to the unions, Spinetta offered to delay the phasing out of Alitalia's cargo operations for two years.

 search domain-b
Alitalia acquisition 'at risk': Air France-KLM chief