Berlusconi promises rescue - and also job cuts - at Alitalia
24 Apr 2008
The European Commission yesterday said it had not received official notification of any bridge loan extended by the Italian government to struggling flag carrier, Alitalia, and so was not in a position to take a decision on whether or not it violated state aid and competition rules.
At its end, Alitalia scheduled a board meeting for late Thursday following the decision by the outgoing government to grant it a €300 million ($477.9 million) emergency bridge loan which would enable it to continue operations.
The carrier's management was also scheduled to meet with its unions.
Meanwhile, prime minister-elect, Silvio Berlusconi, primarily responsible for the exit of serious contender Air France-KLM from the acquisition process promised once again that Alitalia will be rescued by an Italian consortium by late May.
Significantly, he warned that severe job cuts would be inevitable. "This [loan] has given Alitalia the means to survive a few months, time which will be used by a group of Italian entrepreneurs, aided by banks, professionals and airlines, to study Alitalia's accounts," Berlusconi said in the course of a radio interview.
"After due diligence of three, four or five weeks, this new group will present a binding offer and take over the running of Alitalia, which will involve a painful reduction in personnel," he added.
He had conjured up a Italian investing panel to see off the AF-KLM bid. Although most of Alitalia unions had fallen in line with AF-KLM's proposals, some held out, probably emboldened by Berlusconi's threats to overturn the AF-KLM bid.
Post-election he revived a failed bid from Aeroflot, just before a summit meet with Russian president, Vladimir Putin. Now the Italian investing panel appears to have come back into reckoning once again.
