Alitalia Eyes Relaunch In Weeks After Union Deal

Alitalia aims to relaunch as a slimmed down airline in just weeks, a government official said on Saturday, after once-reluctant pilots' unions agreed to a rescue plan by a group of Italian investors.

The breakthrough deal with pilots followed overnight, government-brokered talks and was a major victory for Prime Minister Silvio Berlusconi, who was elected in April promising to save Alitalia from buckling under massive debt and losses.

Remaining hold-out unions at the state-controlled carrier, representing flight attendants, were due to reconvene for talks on Monday and Italian consortium CAI and officials called for the support of all the unions.

But government and union officials suggested the rescue plan appeared to have reached the critical mass needed to put the long troubled rescue effort firmly back on track.

With the agreement by the pilots, I'm confident (the new Alitalia) will be able to lift-off, Infrastructure Minister Altero Matteoli told Italian television.

Raffaele Bonanni from Italy's second biggest union, the CISL, was more explicit, saying: If they all sign, fine. But enough's enough. With what happened last night, it's over.

Under the rescue plan, CAI would snap up the most profitable pieces of Alitalia and relaunch with a fresh cash injection.

Matteoli, citing comments from Alitalia's special administrator, said the new carrier could lift off by October 15.

Still, Italy's civil aviation authority ENAC warned that such a lightening-speed reorganization would be difficult.

Employment minister Maurizio Sacconi warned there were a host of problems to address.

I don't see any last minute surprises, but we need to be aware that there is a lot to do, he told an Italian daily, including securing approval from the European Union, buying smaller airline Air One under CAI's plans to put the two carriers together, and valuing the assets to be bought.

Also, although most unions signed a broad agreement with CAI, they still must fine-tune tricky details on job contracts. Some pilots gathered at Fiumicino Airport in Rome on Saturday objected to the deal signed by union leaders, Italian media reported.

One of the big remaining questions is which foreign partner CAI will take on as part of the new Alitalia.

Lufthansa met Alitalia's unions on Friday to discuss its plans to take a minority stake in the bankrupt airline.

Air France-KLM has said it would be ready to invest in a restructured Alitalia with a minority stake.