=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/04/16/f= inancial1443EDT0173.DTL --------------------------------------------------------------------- Friday, April 16, 2004 (AP) Alitalia board member quits, saying government underestimates crisis (04-16) 11:43 PDT ROME (AP) -- An Alitalia board member has resigned, saying he felt that both the Italian government and the unions have underestimated the airline's crisis, the company said Friday. Roberto Palea offered his resignation Thursday evening -- soon after the government announced it was postponing a decision on an emergency decree aimed at helping the airline industry and saving Alitalia from possible bankruptcy. Palea told Alitalia that he felt "the government, unions and other concerned parts don't have adequate understanding of the seriousness and urgency of the situation," according to a statement released by the airline Friday. Palea also lamented the fact that the company's strategy wasn't being set by its board of directors -- a situation that he said made his job "useless and ineffective," according to the statement. Alitalia has achieved an operating profit only once in the past 11 years, and is calculated to be losing about 50,000 euros per hour ($62,400). It is trying to improve its financial health in the hope of joining an alliance formed by Air France and KLM Royal Dutch Airlines -- an alliance analysts say is key to Alitalia's survival. Alitalia's former chief executive, Francesco Mengozzi, quit the company last month after clashing with unions and the government over proposed job cuts aimed at restoring profitability. Mengozzi had put forward a rescue plan that would have shed 2,700 of Alitalia's 21,300 staffers. But Premier Silvio Berlusconi's government, keen to avoid a clash with unions ahead of key European and local elections in June, refused to back the plan. Unions have staged a series of strikes in the past few months to oppose the job cuts, forcing the cancellation of hundreds of flights. Alitalia's board is scheduled to discuss a rescue plan with fewer job cu= ts next week. The government, which has a 62 percent stake in the company, is planning to help Alitalia through its decree by financing its temporary layoff scheme, cutting taxes on air fuel and overfly rights, and by reorganizing the Italian airport system, news reports said. However, it needs to be careful not to violate European Union competition rules on state aid. ---------------------------------------------------------------------- Copyright 2004 AP