September 28, 2008
Lufthansa Enters Alitalia Talks Chief of German Airline Meets With Unions of Italian Carrier
Executives of Lufthansa, the German airline, met with representatives of unions at the Italian carrier Alitalia on Friday to discuss the possibility of taking a stake in Alitalia as negotiations continued to in an attempt to rescue it.
Lufthansa and Air France-KLM hope to increase their presence in the Italian market by taking minority stakes in Alitalia should a consortium of Italian investors succeed in acquiring the carrier.
The deal by the investor group, CAI, collapsed last week but lurched back to life on Thursday after winning the support of four major unions at Alitalia. Anpav, a union of flight attendants, on Friday also agreed to the plan, and talks continued with unions representing pilots and other airline employees.
The Italian labor minister, Maurizio Sacconi, said CAI, which has extended its offer until Oct. 15, planned to press ahead with its bid even without the backing of the remaining unions.
Representatives of the four major unions backing the bailout met on Friday with Wolfgang Mayrhuber, the chief executive of Lufthansa, and they said he had conveyed its in Alitalia. Lufthansa said Mayrhuber was in Rome at the Italian government's request, to discuss Alitalia.
Air France-KLM, whose deal to buy Alitalia collapsed this year in the face of union opposition, is also considering a bigger stake in Alitalia. It now owns 2 percent of the airline. But it could face an uphill climb, with major Alitalia unions openly supporting Lufthansa and signs that Prime Minister Silvio Berlusconi would also favor the German carrier after opposing Air France-KLM's deal in the past.
"It's not a question of liking one particular nationality - it's about the national interest," said Raffaele Bonanni, head of the CISL, a major union at Alitalia. Lufthansa "has a multi-hub system that works well with our need to favor two Italian hubs, Milan and Rome."
Berlusconi has repeatedly emphasized an eventual foreign partner for Alitalia would be allowed to acquire only a minority stake.
Air France-KLM and Alitalia have been longtime commercial partners in the SkyTeam Alliance, while Lufthansa has a sales and technical alliance with Alitalia's biggest domestic rival, Air One. CAI intends to combine Alitalia's viable operations with Air One.
Alitalia has been on the brink of collapse for years, resulting from a mix of political interference, labor unrest, inefficient strategies and high fuel prices.
Sealing the carrier's latest rescue would be a political triumph for Berlusconi, who made an election vow to save the airline and keep it Italian. His top aide and key ministers have been presiding over the labor talks.
Originally published by Reuters.
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