Directors of Alitalia were today (April 3) considering bankruptcy proceedings after talks on a take over by Air France KLM collapsed.
The talks ended after AF KLM executives, led by chairman and ceo Jean-Cyril Spinetta, decided there was “no longer any basis for further negotiations.”
When the talks collapsed, Maurizio Prato who had backed the take over, resigned a chairman of Alitalia.
Before the talks ended, Italy's outgoing finance minister Tommaso Padoa-Schioppa, said the altnernative to the AF KLM take over would be the appointment of a special commissioner to initiate bankruptcy proceedings.
The crunch came when Italian unions tabled an alternative plan to the AF KLM proposals which had envisaged a major reduction of Alitalia flights from Milan's Malpensa Aiport and substantial redundancies.
The unions' plan was described by AF KLM as "a totally different framework to the one in which Air France-KLM had restricted itself since Autumn 2007."
It said the unions' plan "would involve retaining a number of activities generating large scale-losses within the Alitalia group, seems incompatible with the target of a rapid return to profit."
A statement by the airline said it had no mandate to discuss this plan.
Mr Spinetta said: "I regretfully acknowledge the breakdown in negotiations, which is none of our doing. This is a project I have profoundly believed in and continue to do so, because it would have ensured Alitalia a rapid return to profitable growth."
The talks had begun in March 14 but were undermined by the fall of the centre-left govenrment of Romano Prodi which had backed the take over.
A general election is due on April 13-14 and a right wing government led by silvio Berlusconi is tipped to win.
One of the leadign trades unions UIL pulled out of the talks ealrier this week saying they were "useless" until a new government was in place
Mr Berlusconi has indicated that he would have blocked a foreign take over of the national carrier.