Alitalia's board ponders takeover's collapse

PARIS, France (AP) -- Alitalia's board is meeting Tuesday to discuss the breakdown of takeover talks with Air France-KLM.

Air France-KLM on Monday gave Alitalia's unions a chance to reconsider their stance on its withdrawn takeover bid, which it insisted is the only option to return the ailing Italian carrier to profit.

"It is now up to Alitalia, its employees and unions representing staff to say how they view the future of their airline," Air France-KLM said in a statement after a board meeting which approved chairman Jean-Cyril Spinetta's reasons for breaking off talks last week.

The bid is "the only one that would enable Alitalia to return to profitable growth within a rapid timeframe."

Alitalia's future was thrown into doubt after Spinetta flew back to Paris last week, saying unions' demands would prevent him from quickly making the company profitable again.

Unions have signaled they were willing to reopen talks, but Italy's Economics Minister Tommaso Padoa-Schioppa warned Saturday that they needed to make significant concessions or face irreparable consequences.

The leader of one of Italy's three major labor confederations involved in the negotiations indicated his UIL union could return to the table.

"If Air France's position can be interpreted as a willingness to resume the negotiation, we are ready to discuss" the issues, UIL leader Luigi Angeletti was quoted by the Italian news agency Apcom as saying in a statement.

The Italian government was expected to meet with union leaders later this week.

Without the Air France-KLM offer, Alitalia has few options. It can request bankruptcy protection, but first must acknowledge that it cannot meet its financial commitments. Or it can try to hold on using its cash reserves -- likely selling assets as it has been to stay afloat -- until a new government is in place next month.

Alitalia said it will examine the company's financial situation and assets would tell the Italian government by Tuesday whether it can survive. Until then, shares are suspended. E-mail to a friend

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