Air-France KLM offers to ease Alitalia changes

Jean-Cyril Spinetta, head of Air France-KLM, was Tuesday quoted as telling Italian union leaders in Rome that he was ready to revise his restructuring plans for loss-making carrier Alitalia and extend the end-March deadline set for their answer to his takeover bid.

Union officials present at the talks told reporters that Mr Spinetta said Air France-KLM would present a new document by Friday. He suggested improvements to the offer that could lead to fewer job losses among pilots and at Alitalia's AZ Servizi maintenance wing.

Mr Spinetta was also quoted as saying he would be willing to keep talking beyond March 31 if Maurizio Prato, chairman of Alitalia, was willing to extend the deadline he had set over concern that the airline was running out of cash.

If confirmed, Mr Spinetta's willingness to soften the blow of what he has called a "tough" restructuring plan would be a reversal of his presentation last week when he said there was almost no room for negotiation.

His reported comments eases the pressure on Italy's centre-left government, which last week accepted his offer for its 49.9 per cent stake in Alitalia while warning that bankruptcy within a matter of weeks was the only current alternative.

The Air France-KLM takeover is still conditional on various factors, including agreement of the unions and of whatever government comes to power after mid-April general elections.

Alitalia's survival has become entangled with the Italian election timetable. Silvio Berlusconi, the centre-right opposition leader and former prime minister, last week threatened to veto an Air France-KLM takeover if he won the elections, as opinion polls indicate he will.

Analysts said that Mr Berlusconi's intervention would be undermined if the unions agreed to an Air France-KLM takeover.

Mr Berlusconi is championing what he says is a proposal by a consortium of unnamed Italian industrialists that has not materialised. He has also spoken in favour of the bid by Air One, a smaller Italian rival to Alitalia, and its financial backers, Bank Intesa.

Carlo Toto, an industrialist who owns Air One, last week called to be given three weeks to look into Alitalia's books before deciding whether to revise the bid he made in December. The government rejected that bid and said Tuesday it had not received any direct indication from Italian industrialists of an intention to make a counter-offer.

Shares in Alitalia surged more than 30 per cent on the Milan stock exchange Tuesday, trading more than three times as much as the share swap offer by Air France-KLM, which values the Italian flag carrier at about 10 cents a share.

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