Alitalia eyes re-launch in weeks after union deal

Alitalia aims to be reborn as a slimmed down airline in just weeks, a government official said yesterday, after once-reluctant pilots' unions agreed to a rescue plan by a group of Italian investors.

The breakthrough deal with pilots followed overnight, government-brokered talks and was a major victory for Prime Minister Silvio Berlusconi, who was elected in April promising to save Alitalia from buckling under massive debt and losses.

Remaining hold-out unions at the state-controlled carrier, representing flight attendants, were due to reconvene for talks tomorrow and Italian consortium CAI called for the support of all the unions.

But government and union officials suggested the rescue plan already had labour backing support to go ahead.

"With the agreement by the pilots, I'm confident (the new Alitalia) will be able to lift-off," Infrastructure Minister Altero Matteoli told Italian television.

Raffaele Bonanni from Italy's second biggest union, the CISL, was more explicit, saying: "If they all sign, fine. But enough's enough. With what happened last night, it's over."

Under the rescue plan, CAI would snap up the most profitable pieces of Alitalia and re-launch with a fresh cash injection.

Matteoli, citing comments from Alitalia's special administrator, said the new carrier could lift off by October 15.

Still, Italy's civil aviation authority ENAC warned that such a lightening-speed reorganisation would be difficult.

Labour minister Maurizio Sacconi warned there a host of problems to address.

"I don't see any last minute surprises, but we need to be aware that there is a lot to do," he told an Italian daily, including securing approval from the European Union, buying smaller airline Air One under CAI's plans to put the two carriers together, and valuing the assets to be bought.

Also, although top unions signed a broad agreement with CAI, they still must fine-tune tricky details on job contracts.

One of the big remaining questions is which foreign partner CAI will take on as part of the new Alitalia.

German airline Lufthansa met Alitalia's unions on Friday to discuss its plans to take a minority stake in the bankrupt airline.

Air France-KLM has said it would be ready to invest in a restructured Alitalia with a minority stake.

"The fact that the three major European groups - British, Air France-KLM and Lufthansa, want to take part, shows that the Alitalia plan is credible on an international scale too," Sacconi told Il Giornale newspaper.