Alitalia poised for relaunch following deal

Alitalia is set to be relaunched within a month following union agreement to a rescue deal that will see the injection of Euro2 billion of government cash, a slashing of its network and loss of one-in-three jobs.

Unions representing pilots and cabin crew became the last to sign off the deal yesterday, with the Italian government’s half-share in the airline to taken over by a consortium of Italian businesses.

The airline will merge with domestic carrier Air One and be restructured to focus largely on short and medium-haul routes. Its Euro1.2 billion in debt will be written off.

Alitalia has been in bankruptcy protection since the end of August and appeared set to collapse last week after the Italian takeover consortium announced it was pulling out of a deal.

The government has been seeking a buyer for the airline for two years. It will now offer a stake of up to 25% to one of two international carriers – Air France-KLM and Lufthansa – with the German airline favourite to buy in. Air France-KLM has been keen to take over Alitalia, but pulled out of a deal to buy the carrier early this year in the face of opposition from Italian prime minister Silvio Berlusconi.

Berlusconi is believed to favour a deal with Lufthansa, which would operate both Milan and Rome as hub airports. Air France-KLM has indicated a preference for a single hub in Rome. Berlusconi’s government depends on support from political allies based in the Milan region.

Lufthansa announced plans last month to turn Milan into its first hub outside Germany and Switzerland.

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