Are you sure?

Alitalia union set to back bailout, hopes revived

Italy's biggest union looked set to back a sweetened investor rescue of Alitalia, spurring hopes the bailout will be salvaged before the bankrupt airline loses its license to fly.

Pilot and flight assistant unions that had bitterly opposed the deal also signaled a possible change in stance by convening a meeting of their members citing “new and interesting facts.”

Unions gathered to hold talks at the prime minister's office on Thursday morning, hours before Alitalia's bankruptcy commissioner must present a rescue plan to aviation authorities or have its operating license revoked.

The Cgil union - Italy's biggest - is set to back the sale of Alitalia assets to Italian investor group CAI after it agreed to concessions on salaries and jobs after a flurry of meetings on Wednesday, a source close to the talks and Italian media said.

CIGL boss Guglielmo Epifani also said Wednesday that the talks might be revived.

CAI withdrew its offer for Alitalia assets last week after Cgil and unions representing pilots and flight assistants cried foul over the deal. The investor group has not formally returned to the fray, but is expected to do so if unions get on board.

Hopes the pilot and flight staff unions could also be persuaded to change their mind rose after they held talks with Prime Minister Silvio Berlusconi's top aide late on Wednesday.

Top officials from two major pilot unions - who were quick to attack CAI's rescue plan last week - declined to comment after the late-night talks, calling it a “delicate moment.”

Four unions representing pilots and flight staff have convened a meeting of their members for Thursday afternoon, the head of the Avia flight assistants union Antonio Divietri told reporters.

He said indications that an industrial partner will likely arrive soon “changed the situation,” in an indirect reference to reports that Air France-KLM was in talks to join the CAI consortium with as much as a 25% stake.

Major Italian newspapers like Corriere della Sera and La Repubblica ran banner front-page headlines saying “Alitalia: the deal is near,” with the former declaring that “a deal has never been closer.”

However, the attempted sale of Alitalia, which has sputtered on for 19 months, has made a mockery of previous promises that a deal to settle the airline's fate is around the corner.

An initial auction to sell the carrier failed when all bidders pulled out, while a subsequent takeover by Air France-KLM fell apart due to union opposition.

This time, Alitalia risks having its flights grounded next week if it is unable to present a rescue plan or declare it has enough funds for the next three months - which the bankruptcy commissioner has already said is a luxury it does not have. (Reuters)