Alitalia shares soar on union deal
MILAN, Italy -- Shares in Alitalia have soared as the board of the Italian carrier prepared to approve a rescue plan that will cut jobs and slash wages in an effort to avoid collapse.
The state-controlled airline clinched a final union agreement with flight attendants over the weekend, clearing a key obstacle to its plan to break even by 2006.
The deal followed a similar agreement with pilots and ground staff, who accepted rollbacks to secure the carrier's future.
The weekend pact sent Alitalia shares up more than 5 percent in early trading Monday in Milan. It was the highest level since December 2002.
Chief Executive Giancarlo Cimoli was holding final talks with unions Monday and later was to present the rescue package to board members.
The deal clears the way for Alitalia to gain access to a 400 million euro ($484 million) emergency bridge loan backed by the government which it needs to keep flying past September.
Unions have agreed to about 3,700 job cuts, or just over a sixth of Alitalia's total staff, along with reductions in salaries.
"It still has a long way to go to turn itself around," one trader told Reuters. "This can only be seen as a good starting point."
Cimoli has hinted his plan could see Alitalia reconsider its partnership with Air France, and there has been speculation that the Italian flag carrier could strike an alliance with Germany's Lufthansa.
But in an interview with Corriere della Sera newspaper Monday, Lufthansa Chief Executive Wolfgang Mayrhuber said it was too early to say if he would be open to such a partnership, adding the two companies were very different.
"To be honest, we'll have to see what happens first and then we'll see," he was quoted as saying. "Any acquisition we make has to provide a real gain for our clients, our balance sheet and our shareholders."
