Alitalia Deal is Cloudier Than Ever

Italian Prime Minister Romano Prodi said the government would keep Alitalia Air Lines aloft, although talk of an Air France-KLM takeover has ended.

Air France-KLM Chief Executive Jean-Cyril Spinetta ended talks with union leaders politely Wednesday. The man representing the last bidder for the airline, shook hands with everyone, said he could not accept their proposal and left, a source told the International Herald Tribune.

The Italian government, which owns 49.9 percent of the airline, said it would try to bring the parties back to the table.

Air France-KLM has offered $216 million, for Alitalia, which is losing $5.4 million each day. While Air France-KLM also said it would pump $1.5 billion into the business, the plan includes a reduction of 1,600 jobs, which the Italian unions oppose.

National elections scheduled for April 13 and 14 further cloud the issue.

Former Prime Minister Silvio Berlusconi, a conservative who is favored to win, has said he opposes any deal that puts the airline in control of a foreign company.

One union leader said a deal can be salvaged if everyone remains calm. But another noted Spinetta had left the country and returned to Paris.