September 15, 2008

Unions Divided Over Draft Deal to Rescue Alitalia

Beleaguered Italian airline Alitalia's four largest unions have entered into a draft deal with the CAI consortium, formed to save the carrier from failing, as the Italian government is arranging last-ditch negotiations with investors and unions.

The four unions reportedly represent two thirds of the airline's employees but do not account for most of the pilots and flight attendants.

Alitalia's remaining five unions, which account for around 7,000 of the airline's pilots and cabin crew, have said that any agreement which does not take them into consideration will be counter-productive.

Industry sources consider these unions to be crucial to the deal success. The Italian labor minister Maurizio Sacconi is expected to meet representatives of these unions in last ditch efforts to save the airline.

The CAI consortium has put in a E1 billion offer to help Alitalia continue flying, while the airline will also merge with Italy's second largest carrier Air One. Alitalia's E1.2 billion debt is expected to be absorbed by another company, which will later be liquidated.