HAVING WATCHED THEIR trades unions scupper an Air France-KLM rescue bid, Alitalia management and staff were last month anxiously waiting to see what plans new prime minister Silvio Berlusconi might have for the future of their airline.
The proposed takeover by Air France-KLM had been beset by problems from the start. The Italian government has been keeping Alitalia afloat for years, flying in the face of European legislation which says carriers cannot be state-aided.
When Romano Prodi's centre-left government finally decided to off load its 49.9 per cent stake in the failed airline, Alitalia's board was ultimately faced with a choice between bids from Air France-KLM or Air One, Alitalia's much smaller compatriot carrier. The directors chose the former, sparking a public outcry which was pounced upon by Silvio Berlusconi, subsequently re-elected for a third term at the top.
Berlusconi has said that if re-elected, he would scrap any Air France-KLM deal and put Alitalia in the hands of Air One and Banca Intesa, Italy's second-largest bank.
Air France-KLM didn't help matters by insisting that Alitalia's operations would have to be centred on Rome's Fiumicino airport and scaled back at Milan Malpensa. The Franco-Dutch combine said that if Alitalia was to make a "rapid return to profit", 2,000-plus jobs would have to go.
The proposed retreat to Rome met with an angry response from prominent Milanesi, strike threats, and the threat of a €1.25 billion lawsuit from Malpensa airport operator SEA, but it was the threatened job cuts that eventually killed off the deal.
Air France-KLM said it would not go ahead with its planned purchase without the full support of the nine trades unions involved. The unions would not accept the redundancies, and the talks foundered.
Alitalia chairman Maurizio Prato promptly resigned, and trading in Alitalia shares was suspended. The airline has racked up debts estimated at €r.5 billion, and is haemorrhaging money at a rate of € 1 million a day.