|
ROME—Italian Prime Minister Silvio Berlusconi is under
pressure to save national airline Alitalia SpA from
bankruptcy after an investor group he backed withdrew
its bid.
With a
total of 19,000 jobs at Alitalia and thousands of others
at Italy’s main airports hanging in the balance,
Berlusconi, 71, is facing the biggest challenge of his
four-month-old government. Union leaders called on the
premier to step in and fulfill his campaign pledge to
save the company after an investor group led by Piaggio
& C. chairman Roberto Colaninno backed out.
“From a
political point of view, it’s not possible to let
Alitalia go bankrupt,” said Salvatore Provinzano, an
analyst with IlNuovoMercato in Rome. “It’s too big a
part of the economy. I don’t think this is the end.”
Alitalia
risks becoming the first major European flagship airline
to collapse since Swissair Group and Belgium’s Sabena in
2001. The Rome-based company, which has been losing $3
million a day and may run out of funds by the end of
this month, filed for insolvency on August 29 to allow
the state-backed rescue to begin.
Aided by
union opposition, Berlusconi rejected Air France-KLM
Group’s offer to buy Alitalia during his campaign for
power earlier this year. He insisted that the airline
was too important for Italy’s economy to be sold to a
foreign company.
“We may
be on the edge of the abyss,” Berlusconi said after news
that the investor group, known as CAI, had withdrawn its
bid for Alitalia after only three of nine unions
accepted the terms of the contract they were offered.
CAI’s
rescue included about 3,000 job cuts and a measure
forcing employees to work more hours for the same pay.
Unions argued that the job cuts were much higher because
thousands of part-time and temporary workers will be
cut. Five of the unions, representing most of the 7,000
pilots and cabin crew, continued to seek concessions
until a deadline for a decision expired.
“Prime
Minister Berlusconi will definitely intervene,” said
Fabio Berti, head of the Anpac pilots’ union, according
to comments made to Ansa news wire. “He’ll have to.”
Some
analysts said that Alitalia, which is already under
government bankruptcy protection, had no choice but to
liquidate.
“The
most likely scenario is that the government will break
up the company and cancel contracts,” said Diogenis
Papiomytis, a transport analyst at Frost & Sullivan in
London. “That will have huge social costs and will
probably set off industrial action.”
Berlusconi and other ministers involved in the talks
were quick to blame the unions, who have historically
been close to the opposition parties. Labor Minister
Maurizio Sacconi, in an e-mailed statement, called the
opposition of the unions—“absurd’’ and said it was one
of the main reasons that no other bidders had emerged.
Unions also scuppered in April a takeover offer from Air
France.
As the
talks broke down, no one knew how long Alitalia could
continue to operate without finding a buyer. Italy’s
aviation authority, which can revoke the airline’s
license, called the Alitalia commissioner to a meeting
next week to evaluate the company’s financial situation.
--Bloomberg |
