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Italian Cabinet Meets to Discuss Ailing National Airline


An urgent Cabinet meeting has been called in Rome to discuss the future of Italy's struggling state airline Alitalia. Trading in Alitalia shares was suspended after Air France-KLM abandoned an offer to purchase Alitalia. Sabina Castelfranco reports from Italy's capital.

Feverish discussions are underway in Rome between authorities, airline officials, and union leaders to try to find an end to the impasse affecting Italy's struggling state airline, Alitalia. An urgent Cabinet meeting was called to discuss what the next moves should be.

Trading in Alitalia shares has been suspended on the Milan stock exchange. Air France-KLM announced late Monday it is abandoning a $220 million offer to purchase Alitalia.

Meanwhile, the airline will be meeting union representatives Thursday. And, Italian aviation authorities have warned that Alitalia's license could be revoked if it does not meet its obligations, including safety guarantees.

Alitalia has been undergoing serious financial difficulties for months. The airline is losing about $1.5 million a day and has been headed for possible bankruptcy protection. Union leaders are aware this could mean the lay off of 7,000 employees and the elimination of 100 or more unprofitable routes.

One union representative, Andrea Cavola, says the government must intervene immediately, with a bridge loan or in another way, because there is no time to lose. He is extremely disappointed with how negotiations have been dealt with until now.

Cavola says the way in which the sale of Alitalia has been managed has been lacking in every sense, and the real situation has never been transparent. He adds that the unions have said more than once that the government's choices were completely unacceptable.

Alitalia employees are in despair.

One woman says it really is not a nice situation, it is really is quite unpleasant.

Workers realize there is not much they can do but wait. One employee says all they can do is see how political leaders intend to find a way to resolve this situation. He says the stakes are high because this time they are not just discussing a contract renewal or the defense of certain privileges, but it is the future of the airline.