Page last updated at 13:39 GMT, Sunday, 14 September 2008 14:39 UK

Alitalia crisis meeting held up

Alitalia plane
If no deal is reached, Alitalia, could go into liquidation next week

Emergency talks have been held up between Italy's government, investors and trade unions over attempts to save the airline Alitalia from collapse.

The government has been trying to broker a rescue package with investors, which would involve a sell-off of profitable parts of the airline.

A meeting originally convened for 1800 Italian time (1600GMT) has been pushed back to 2200 Italian time (2000 GMT).

If no deal is reached, Alitalia, could go into liquidation next week.

With the airline saying it is running out of money to buy aviation fuel, the government needs to persuade unions to back a deal that involves job cuts.

The only offer on the table is from Italian consortium CAI, which only wants Alitalia's profitable operations.

Unions have so far rejected this deal as it would mean major job losses.

The BBC's Frances Kennedy, in Rome, says informal discussions throughout the day were meant to iron out enough of the obstacles to get the parties back to the table for a final do or die negotiating marathon.

However the meeting at the Labour Ministry has been twice delayed.

This is a sign that the nine unions and the cartel of Italian investors wanting to buy part of Alitalia are still far apart on key issues, like job losses, salary cuts and industrial strategy, our correspondent says.

Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia.

Securing the airline's future was one of his main election pledges before he returned to power in May.

Failed French takeover

Back in April, plans for Alitalia to be bought by Air France-KLM collapsed due to union opposition to planned job cuts.

Italy's civil aviation authority said on Saturday that Alitalia's operating licence was at risk due to the airline's admission that it was running out of funds to buy fuel.

Alitalia is currently being run by administrators after seeking bankruptcy protection on 29 August.

The Italian government owns a 49.9% stake in Alitalia, but it cannot simply pump public funds into the airline as there are strict European Union rules preventing state support for airlines.


SEE ALSO
Alitalia 'running out of fuel'
13 Sep 08 |  Europe
Alitalia rescue deadline extended
12 Sep 08 |  Business

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