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Thu, Nov 20, 2008

Italian Government Clears Sale Of Alitalia To Investment Group

Will Carrier Pull A "Phoenix?" Place Yer Bets...

When it comes to surprise news, this isn't at the level of a certain, very hot place seeing its first snowfall... but man, it's close. The Italian government has signed off on the sale of bankrupt national carrier Alitalia... and furthermore, someone actually wants to buy the struggling airline, which was described as "cursed" by its former CEO earlier this year.

CNN reports a group of private investors has agreed to buy the carrier for a minimum price of 1.052 million Euros. That's more than Compagnia Aerea Italiana (CAI) wanted to spend for the carrier, but the group has apparently agreed to the government's terms.

Economic Development Minister Claudio Antonio Scajola signed off on the purchase plan this week, according to a statement on the ministry's Web site. "CAI can now proceed in choosing a foreign partner that will strengthen the presence of Alitalia in the global market."

The exact purchase price has not been revealed.

CAI was the sole remaining bidder for the assets of Alitalia, after a number of interested parties were sent running this year by the combination of economic strife and labor revolt that currently runs rampant at the woefully neglected airline.

As ANN reported, Alitalia succumbed to the inevitable and filed for bankruptcy in August. The move came four months after Air France-KLM Group walked away from what had been seen as the strongest bid for the airline; the group walked away from the table, however, when it became clear union opposition to the idea of an Italian airline being run by a predominantly French concern.

That left CAI... whose offer isn't much more appealing to Alitalia's workforce. The group of investors, headed by Piaggio SpA Chairman Roberto Colaninno, has proposed the "Phoenix" plan for Alitalia. Like the mythical bird, the proposal would allow Alitalia to rise from the ashes of its own demise -- but only after the airline sells off its unprofitable units, slashes jobs, and merges with its largest domestic rival, Air One SpA.

Sure enough, the unions representing most of the airline's pilots and flight attendants have opposed the impending CAI deal and the contracts being offered.

As of Wednesday evening, they had not commented on Fantozzi's approval... but protesting employees have recently taken up a "work-to-rule" action -- in essence, performing only the bare minimum of work required by their contracts in an attempt to slow airline activity and pressure management to pay attention to their grievances. The move has caused hundreds of flight delays and cancellations.

While it's worth celebrating the fact one of the world's best-known airlines may live to see another day after all -- despite almost insurmountable odds -- one can't help but wonder if former Alitalia CEO Maurizio Prato, who resigned in April after Air France-KLM packed its bags, didn't have it right all along...

FMI: www.alitalia.com

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