Alitalia Names New Chairman, Urges Air France to Rekindle Talks

The Italian government vowed Thursday to keep its planes flying despite the collapse of talks with Air France-KLM, the sole remaining bidder for the money-losing carrier.

The government of Prime Minister Romano Prodi said it would ensure the continued operation of the Italian flag carrier while it sought to learn “whether there were still margins for an accord with the unions.” The fate of Alitalia, of which the Italian government owns 49.9 percent, has become an issue in the general election scheduled to be held this month.

Alitalia SpA, which loses more than US$1.6 million a day, moved closer to bankruptcy Thursday after Air France-KLM Group broke off takeover talks, scuttling a 15-month effort by Italy to find a buyer for the airline. Alitalia had earlier this year shared that it needed to raise 750 million euros by mid-year to stay in business.

Italy’s government also appealed to Jean-Cyril Spinetta, head of Air France-KLM, in a desperate effort to revive collapsed takeover talks with Alitalia’s trade unions and avert looming bankruptcy of the national flag carrier.

The airline also named Aristide Police as new chairman to replace Maurizio Prato. Earlier this week, Prato had resigned from his position as the company’s Chairman and Director.

Air France-KLM said in a statement that it had “regretfully” broken off negotiations because the union proposal “would involve retaining a number of activities generating large scale-losses within the Alitalia group.”