Page last updated at 21:50 GMT, Thursday, 3 April 2008 22:50 UK

Alitalia announces new chairman

Maurizio Prato
Maurizio Prato has tendered his resignation as Alitalia chairman

Italian airline Alitalia has announced a new chairman, after takeover talks with Air France-KLM collapsed.

The firm said Aristide Police would take over the position a day after Maurizio Prato resigned when talks to reach agreement with unions failed.

The firm said it would assess its finances and tell the government by 8 April whether it could survive.

Having earlier failed to reach an agreement, unions said on Thursday they would be prepared to negotiate again.

Mr Prato had warned unions that the firm risked going bankrupt unless a deal was reached.

Alitalia, whose board had spent Thursday in emergency meetings after Mr Prato's departure, said the board was still looking at the takeover offer in order to assure the firm's profitability even though the deadline has passed.

The Italian government, which has a 49.9% stake in the firm, meanwhile said it would check if Air France-KLM's decision to withdraw from talks was final.

Shares suspended

Trading in Alitalia shares was suspended on Thursday.

"This company is cursed: only an exorcist can save it," Mr Prato was quoted by unions as saying after the negotiations collapsed.

Mr Prato's successor, Mr Police, is a lawyer and existing board member.

This is a very dire situation
Erika Young

The Italian government has been trying for more than a year to sell its stake in the troubled national airline and says there are no other bidders.

Failure to reach any agreement leaves the state-owned airline on the ropes just days before a general election.

The government's sale of Alitalia has been opposed by prime ministerial candidate Silvio Berlusconi.

'Dire situation'

Unions had objected to the expected loss of 2,100 jobs under the takeover plans.

But late on Thursday eight of the nine unions representing Alitalia's 11,000 workers said they were prepared once again to negotiate with Air France-KLM or other possible players.

FILT-CGIL, the largest of nine unions representing Alitalia's workforce had earlier blamed Air France-KLM's chairman Jean-Cyril Spinetta, for the collapse of takeover talks.

Meanwhile the final straw for Air France-KLM appeared to be a last minute attempt from unions to broker a side deal with an unidentified Italian company.

Air France-KLM has twice agreed to extend the deadline for a deal to take over the cash-strapped airline and increased its offer to 139m euros.

Administration risk

On Wednesday, Economy Minister Tommaso Padoa-Schioppa said the only alternative to the Air France-KLM offer would be to put Alitalia into emergency administration.

He also said a 300m euro ($470m; 236m) state bridging loan to Alitalia would be impossible unless the Air France-KLM deal was signed.

Air France-KLM's offer to buy Alitalia for 0.10 euros per share would have needed union backing to go ahead.

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