Word: alitalia
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Imagine a video of a plane hurtling toward the ground - and then suddenly someone hits the pause button. That may be the best metaphor for the financial disaster that currently is Alitalia, the Italian carrier that is this close to bankruptcy...
...breakdown of negotiations for Air France-KLM to buy Alitalia has left the Italian airline closer than ever to bankruptcy. On Thursday evening, the Milan stock exchange announced that Alitalia shares will be suspended until April 8, following the public company's next board meeting. The failure of talks with Air France, also prompted yet another resignation at the top, as Alitalia chairman Maurizio Prato stepped down just seven months after taking over the troubled air carrier with the goal of facilitating its sale. Now, nothing is likely to move until after Italy's April 13-14 national elections...
...French-Dutch Air France-KLM was the only bidder left in an auction that began 15 months ago when Italy's Economy Ministry put its 49.9% of the debt-saddled company on the auction block. Air France Chairman Jean-Cyril Spinetta pulled out after Alitalia union representatives arrived at the table with brand new 11th hour terms after all sides had worked for weeks on a standing framework that included layoffs of around 2,100 and the closing of Alitalia's cargo division. The talks, of course, collapsed...
...been an example of Italy's endemic political paralysis. Prodi has been busy trying to fend off - and recover from - a half-dozen near-crises since taking office 20 months ago, rather than focus on much-needed reforms to the pension and justice systems. Meanwhile, state air carrier Alitalia bleeds money, and its hoped-for merger with Air France-KLM may now be put back on hold as the political class focuses on fighting among itself...
...Still, the plan hammered out by Maurizio Prato, Alitalia's third chairman in the past year, may contain a corporate logic that goes beyond all the apparent wheel-spinning. The company, no one doubts, must be sold. The 5,000-pound vulture in the room is named Air France-KLM, which sat out this past year's round of bidding. Alitalia's initial cuts (modest as they are) to both personnel and fleet, its search for some hanging-on cash, and above all its shifting its hub southward all make it a more attractive regional partner for Air France following...