Alitalia Unions Wary After Meeting Financier

January 9, 2007

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Trade unions representing workers at Alitalia remained wary on Tuesday after meeting with a little-known Italian financier who has expressed an interest in buying a stake in the airline.

"We are a long way from being able to make any judgments," Mauro Rossi, the head of the CGIL union's airline workers, told reporters after the meeting with the financier, Paolo Alazraki. Rossi was also speaking on behalf of the other main unions, the CISL and UGL.

He said Alazraki had promised to send the unions some documentation and guidelines concerning his plan, which they would assess.

Earlier on Tuesday, the pilots' union, Anpac, which also met with Alazraki, said his plan was no solution to the problems of Italy's flagship carrier, even though it was "innovative and courageous."

"Anpac believes what is needed is an international alliance or a unification of all the Italian carriers on a stand-alone model," the pilots said in a statement.

Alazraki's plan was "not at all applicable to the current European context," the statement said.

Alazraki, who heads a British consulting company called Wonders and Dreams, said last Thursday that he was working with 16 investors on a bid for a piece of Alitalia put up for sale by the government, but financing for fleet renewals and debt reduction has yet to be raised.

"The financial needs amount to EUR3 billion (USD$3.9 billion) because there is a need to renovate the entire fleet and cut debt," Alazraki said at the time.

Alitalia, which has not posted a profit since 2002, has forecast a loss of more than EUR200 million (USD$259.8 million) for 2006.

Italy's government is looking to sell at least a 30.1 percent stake in the airline and has said it will accept bids until January 29. The government's current stake is 49.9 percent.

Few details are known about Alazraki and his business dealings. The financier has said that if his bid is successful he will not implement massive layoffs. But he has also said it will take 24 months to stem the airline's losses.

Rothschild is also working on a consortium of investors that aims to bid for a stake in Alitalia, a source close to Rothschild said on Tuesday, confirming press reports.

Several newspapers reported on Tuesday the Rothschild-led consortium would include Italian as well as two US funds.

Another source familiar with the matter said US buyout firm Texas Pacific Group, which has invested in carriers including Continental Airlines, was not a member of the consortium but might be interested in joining.

Texas Pacific declined to comment on the matter.

Smaller Italian airline Meridiana, which is controlled by Prince Karim Aga Khan, is also expected to put in a bid, according to press reports. Last month, Meridiana bought 30 percent of fellow carrier Eurofly.

Long-term potential suitor Air France has so far made no comment on the Alitalia sale.

Alitalia and Air France own 2 percent stakes in each other.

(Reuters)