ADVERTISEMENT

Alitalia may lose license in days, invites offers

Interview

Aviation authorities may withdraw Alitalia's license in 3-4 days if the administrator making a last-ditch attempt to sell it off does not present emergency cost-cutting measures at a meeting.

After the withdrawal of an Italian rescue bid because of opposition by pilots and cabin crew, the government-appointed administrator made a last bid to attract offers for Alitalia, although previous attempts to find a foreign buyer have failed.

Flights continued as usual but the state-controlled airline faces being grounded, and its assets liquidated, if there is no last-minute decision by dissident unions to accept the job cuts and slimmed-down contracts that the CAI consortium had offered.

“Alitalia is flying with a provisional license,” the head of aviation body ENAC, Vito Riggio, said ahead of talks with the airline's special administrator at 10 a.m.”

“If the (cost-cutting) financial plan doesn't arrive in 3-4 days the license will be suspended,” Riggio told local radio.

Suffering from the high fuel prices and an economic downturn that have hit the airline sector globally, Alitalia has been on the brink of collapse for years as political interference and labor unrest bled it of cash and caused it to pile up debt.

Prime Minister Silvio Berlusconi, who made an election vow to rescue the airline, acknowledged this weekend that no foreign airline would step in and Alitalia may be doomed to bankruptcy.

Administrator Augusto Fantozzi invited offers of interest in all or part of Alitalia by September 30, via the company's website.

“The only significant offer ... was withdrawn,” Fantozzi said in the statement. “Therefore, the special administrator intends to verify the existence of other interested parties.”

Fantozzi told one newspaper on Sunday that the tender would just “formalize what I have been doing - without any results so far despite all my efforts - regarding the main assets.”

The only interest has been in Alitalia's heavy maintenance, cargo, handling and catering units and call centre. Fantozzi has contacted Air France, Lufthansa and British Airways but said: “Nobody has stepped forward.”

A tender for the state's 49.9% stake by the previous centre-left government attracted 11 bidders who all pulled out.

A second attempt led to Air France-KLM being picked as buyer but the deal fell down on opposition by unions and Berlusconi, who was campaigning for office and said Alitalia must stay Italian.

The media mogul returned to power in May promising to rescue it and used his influence to rally 16 investors in the CAI consortium.

But CAI withdrew its offer last Thursday and has said it will not modify its offer to make it more acceptable to unions.

The government rules out further state aid or, as some leftists propose, the re-nationalization of Alitalia. Italy is already in trouble with the European Commission over a €300 million ($435.2 million) loan to keep the airline flying. (Reuters)

ADVERTISEMENT

Czech economic confidence weakens in November Analysis

Czech economic confidence weakens in November

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

The strongest move - Morgan Stanley Hungary head and Chess F... Podcasts

The strongest move - Morgan Stanley Hungary head and Chess F...

New Jewish cultural hub opens in Budapest City

New Jewish cultural hub opens in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.