=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/n/a/2008/09/18/financial/= f045607D32.DTL --------------------------------------------------------------------- Thursday, September 18, 2008 (AP) Italian minister: Alitalia 'hangs by a thread' By COLLEEN BARRY, AP Business Writer (09-18) 05:07 PDT MILAN, Italy (AP) -- Alitalia's future was "hanging by a thread" on Thursday, Italy's labor minister said, as unions deliberated about whether to accept a last-ditch effort to relaunch the airline. The unions faced a deadline of 3:50 p.m. (1350 GMT) to sign the plan backed by a group of Italian investors led by Roberto Colaninno, chairman of Piaggio, a scooter maker. The investors were to meet 10 minutes later and said they would withdraw their offer, if the airline's nine unions have not supported it. "It is difficult to say what will happen, but I believe that Alitalia's future is truly hanging by a thread," Labor Minister Maurizio Sacconi told Italy's private Canale 5 television. With no other offers on the table, Alitalia's administrator, Augusto Fantozzi, has said that would mean the national carrier's failure. The airline would then take the account books to court to begin liquidation proceedings. Prime Minister Silvio Berlusconi has said the airline's 20,000 workers should not expect generous financial packages in the case of liquidation. Past deadlines in this process have slipped, but Fantozzi warned that the cash situation is increasing pressure on the airline's operations. Alitalia must come up with 1.4 million euros every day on fuel costs alone. The airline has been losing 2 million euros (around $3 million) a day, a= nd analysts have said a loan of 300 million euros approved by the last government to keep the airline flying won't last. The airline said it had 314 million euros ($446.63 million) cash on hand at the end of July, a decrease of 61 million euros from a month earlier. The net debt was 1.17 million euros ($1.73 million), an increase of 57 million euros ($84 million). Worker protests forced the cancellation of about 50 flights Wednesday, b= ut no major disruptions were reported Thursday. Under the deal, the group of Italian investors would inject 1.5 billion euros ($1.4 billion) into the bankrupt airline, take over the profitable assets and merge with Italy's No. 2 carrier, the much-smaller Air One. The government and investors also want to bring in a foreign partner to take a minority stake. Air France-KLM, Lufthansa and British Airways all have been named as possibilities. Three of the four larger union confederations have said they would accept the deal, but smaller ones, including those representing pilots and flight attendants, continue to object to the number of layoffs and pay cuts foreseen in the new labor contracts. The pilots' unions in particular have been fighting to preserve jobs. On Thursday, the union confederation CGIL was meeting with the five smaller holdouts to draft a new proposal to present to the investor group. However, the group has made clear that the time for new deals has past. The current offer calls for 3,250 layoffs and generous benefits of up to 80 percent of pay for eight years for those who lose their jobs. But Berlusconi warned this week that the unions should not think this offer would apply in the case of liquidation. The previous government of Romano Prodi launched the process to sell the government's 49.9 percent stake in the airline nearly two years ago. After an auction failed, the airline entered into talks with Air France-KLM, which made an offer to take over Alitalia that was withdrawn last spring amid Italian union objections and an election campaign during which Berlusconi pledged to find an Italian solution. ---------------------------= ------------------------------------------- Copyright 2008 AP <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".