Attempts to save Italian airline Alitalia from possible collapse entered a crucial phase today with the outcome of government-sponsored rescue talks and a board meeting still in deadlock.
Representatives of the Italian government, unions and management were to resume talks this morning in the hope of agreeing on a wide-ranging restructuring plan before an afternoon board meeting.
A third straight day of talks aimed at securing a deal for the state-controlled airline broke up after midnight with the various parties keeping quiet about any possible progress.
Alitalia shares and bonds were still suspended pending the outcome of the board meeting. Shares closed down 12.5 per cent on Tuesday at 21 cent, which values Italy's biggest airline at just €795 million .
Without a deal today, Alitalia executives may have no option but to ask shareholders to consider calling in outside administrators or liquidating the group.
The last time an administrator was summoned to take charge of a prominent Italian company was last December for food firm Parmalat, which collapsed due to a financial scandal.
However, Italian deputy prime minister, Mr Gianfranco Fini, who has led the government delegation at this week's talks, sought to play down the speculation. "Alitalia is certainly in trouble, but it hasn't folded. I don't see how one can trample on company and civil law," he said.
Alitalia management this week presented unions with its plans to cut 5,400 jobs from the carrier's payroll of 22,500 through a mix of job cuts and outsourcing. Executives say this will save the airline some €60 million.
Unions are opposed to job cuts, arguing Alitalia's labour costs are lower than those of rivals such as newly merged Air France and KLM, and that the company should find savings elsewhere.