Airlines: Police Raid Adds New Twist to Alitalia Saga

It is already the business story with everything: political gambles, patriotic sensitivities, all-night talks in smoky rooms and uniformed flight attendants chanting protest slogans beneath the prime minister's window. All that was missing from the saga of Alitalia's demise and planned rebirth was the police and a whiff of suspected illegality.

No longer. Officers of Italy's revenue guard turned up yesterday at the Rome headquarters of its bankrupt flag-carrier and walked out with 10 years' worth of company accounts. The operation was mounted by prosecutors investigating the airline's demise.

They opened an inquiry after the company sought bankruptcy protection on August 29, acting on a petition from a consumer association, Codacons, which represents shareholders and employees.

The president of Codacons, Carlo Rienzi, welcomed yesterday's raid. "Now we want the responsibilities and names of those who have brought about, or contributed to, the wrecking of Alitalia to be determined and made public."

According to Italian media reports, no one has so far been placed under formal suspicion. The police operation was mounted as government ministers, union leaders and the investors who stand ready to buy the firm struggled to reach an agreement. Under the terms of a rescue plan designed to ensure Alitalia remains Italian, a consortium of businesspeople assembled by the prime minister, Silvio Berlusconi, would take on the airline's more profitable units and merge them with its main domestic rival, Air One.

The investors are due to meet tomorrow and have warned they will walk away from the deal unless the workers' representatives agree to their industrial plan and new contracts.

The main trade union federations have given their blessing to the consortium's industrial plan but the smaller, more militant unions that represent the pilots and cabin crew were cut out of the negotiations. By last night, talks on the new contracts had barely started.

The collapse of Alitalia would spell big political trouble for Berlusconi, who has invested a vast amount of his personal political capital in the exercise. As the hours ticked away, the prime minister warned that, if Alitalia went under, he would order a "drastic" reduction of the generous welfare support promised to the 3,250 workers who would be laid off.

Under the terms of an outline plan agreed with the main trade union federations, they would receive 80% of their salaries for up to seven years. Thousands more workers would be found jobs in other companies, though in many cases on lower pay.

In perhaps the most eloquent comment on this increasingly bizarre affair, the leader of the radical SDL union, Paolo Marras, said: "No one knows anything about how it will turn out."