LUFTHANSA AND AIR France-KLM are considering taking a minority stake in the Italian consortium seeking to rescue Alitalia from bankruptcy, representatives of the consortium said yesterday.
Alitalia, Italy's loss-making flag carrier, has gone from near-bankrupt outcast to an interesting proposition for both airlines following progress in persuading Alitalia's nine unions to accept 3,250 redundancies and pay cuts.
Anpav, a union of flight assistants, yesterday joined four big labour federations in accepting the proposed takeover.
Pilots were still holding out for better conditions.
Lufthansa chief executive Wolfgang Mayrhuber was invited to Rome yesterday by Italy's centre-right government to discuss Alitalia's future.
He also met the four main union federations.
Raffaele Bonnani, head of the Cisl federation, said it was evident Lufthansa and the unions were interested in a deal.
Compagnie Aerea Italiana (CAI), the takeover vehicle formed by 17 Italian businesses and chaired by Roberto Colaninno, head of Piaggio, the scooter-maker, has an interest in playing the German and Franco-Dutch airlines off against each other.
A CAI representative said both airlines were looking at taking a stake of 10-15 per cent in the consortium. CAI, which plans to raise €1 billion, has offered €400 million for the viable assets of Alitalia and intends to merge them with Air One, its smaller Italian rival.
People familiar with the talks on the German side said there was a chance of reaching a deal and that Lufthansa could consider taking a 20 per cent stake, with a view to taking full control later.
Air France said it remained interested in taking a stake of 10- 20 per cent.
It already has a 2 per cent stake in Alitalia but its takeover was rejected by the unions last April, and also by Silvio Berlusconi, centre-right prime minister, who has ruled out a majority stake for a foreign owner.
CAI's shareholders are to be locked in for five years, after which a foreign takeover is considered likely.
Lufthansa decided not to bid for Alitalia when the Italian government put its 49.9 per cent stake up for sale last year.
It also ruled out a combined bid with Air One, with which it has a financial partnership, because of disagreements over control with its Italian owner, Carlo Toto.
Lufthansa could be more attractive for the government because of its plans to develop Malpensa airport in Milan, a stronghold of the Northern League, which is a key member of the country's coalition government.
Alitalia risks becoming the first major European flagship carrier to collapse since Swissair Group and Belgiums Sabena went under in 2001.
The Rome-based airline, which has only made a profit in four years since it was established in 1946, has been burning through $3 million a day, and filed for insolvency a month ago to allow the state-backed rescue negotiations begin.
Antonio Divietri, president of the Avia union, said the parties have made "some progress" on the talks.
Fabrizio Tomaselli of the SDL union told reporters in Rome the positions of the flight attendants and the investor group remained "distant".
- (Financial Times service)
