Silvio Berlusconi, the Italian Prime Minister, will consider the option of "temporary nationalisation" of Alitalia after the dramatic collapse yesterday of a rescue bid for the troubled airline by an all-Italian consortium.
As the Italian Cabinet prepared to meet to discuss the crisis this morning, reports said Mr Berlusconi had wrongly calculated that CAI, the consortium of industrialists, would go ahead with the rescue plan despite the refusal of CGIL, Italy's largest union, and the pilots' union to accept it.
Mr Berlusconi is putting pressure on the investors to change their mind and "try again" with the support of trade unions willing to back the deal.
His miscalculation accounted for his air of optimism yesterday afternoon as the deadline for the unions to accept the CAI offer approached.
When his assumptions proved false, the Italian leader was nonplussed, according to aides, asking his advisers, "What do we do now?". He soon bounced back, however, vowing "I will not give up" and undertook to keep Alitalia flying, the aides said.
Il Giornale, the newspaper owned by the Berlusconi family, today put the blame for the crisis on the left-wing CGIL and its leader Guglielmo Epifani under the headline: "Alitalia collapses — thanks to the unions". The paper added: "The unions have tried for years to bring down Italy but they have brought down Alitalia instead".
Most newspapers condemned Alitalia staff at Fiumicino, the main Rome airport, for exulting as news of the withdrawal of the rescue plan came through, with airline staff punching the air and shouting "Better a collapse than those bandits", a reference to the industrialists in the consortium. "The cost of this irresponsibility is clear" said Il Messaggero, the Rome daily: "163 aircraft on the ground and 18,500 employees without jobs".
It said the protesters were "like those who danced on the Titanic as the ship went down". They were like people "smiling at a funeral", said La Repubblica, reporting that Air France had already applied for Alitalia's slots at Fiumicino, while Lufthansa was seeking the slots at Malpensa near Milan.
Alitalia risks becoming the first big European flagship airline to collapse since Swissair Group and Belgium's Sabena went under in 2001.
The company, which has been losing €2 million (£1.58 million) a day, has debts of more than €1 billion and risks running out of cash by the end of this month, filed for insolvency at the end of August so that the state-backed rescue and relaunch effort could get under way.
Mr Berlusconi earlier this year rejected an offer from Air France-KLM to buy Alitalia, saying he preferred an "all-Italian" solution.
Air France-KLM withdrew its offer in any case because of the unions' "impossible" conditions. Mr Belusconi, who was campaigning for election at the time, was accused by the Left of "beating the nationalist drum" to get votes and, in the process, passing up a chance to rescue Alitalia with foreign help.
The CAI rescue package included more than 3,000 job cuts and contracts laying down more hours for the same pay.
Augusto Fantozzi, the government-appointed commissioner running Alitalia, said if no further credible bids were forthcoming he would have to start liquidation proceedings. He said the carrier might start grounding flights soon. But asked if Alitalia would continue flying until the money ran out, he replied: "That is what the law stipulates and I shall respect the law."
Maurizio Sacconi, the Labour Minister, said: "The road now opens up that leads to the collapse of all the companies in the Alitalia group." He confirmed a warning by Mr Berlusconi that workers left without jobs because of liquidation would not benefit from the generous redundancy terms offered as part of the CAI rescue plan.
Italy's civil aviation authority has called Mr Fantozzi to a meeting after the weekend to decide if Alitalia's temporary licence should be revoked.
The CAI consortium had undertaken to plough more than €1 billion into Alitalia, merging its flying operations with those of Air One, Italy's second biggest domestic airline, while selling maintenance operations and other support activities.
Source: The Times
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