15 September 2008

The last days of Alitalia or an 11th hour rescue?

It seems like this weekend would see the end of a lot of storied names. Bank of America swallowed Merril Lynch. Lehman Brothers declared Chapter 11 and Alitalia Unions decided that fighting was much more fun than working. So the carefully crafted Italian design of Berlusconi was doomed for nought or is it.

Officially it is still possible theoretically that Alitalia will survive but most of the betting pool says No.

The betting is 1-5 now on Alitalia going bankrupt first. Some of the other odds have also worsened.

However at the very last minute it seems that the impending threat of no fuel and canceled flights from today was JUST enough to nudge the first group of unions in the pool to agree to a deal which requires work rule changes, wage reductions and yes redundancies. Italy's four main union confederations -- CGIL, CISL, UIL and UGL -- agreed during overnight talks with the government and a business consortium offering to buy the carrier to the rough outline of a rescue plan that includes job cuts.

It is not over. And even if it is - there is still the hurdles of the EU to overcome.

Talks are now underway in Rome to put meat on the initial deal and to persuade the other 5 Union groups to join the agreement.

This is better than a soap opera.

No comments: