Berlusconi Plan to Save Alitalia Gains Momentum

Intensive efforts by Silvio Berlusconi's government to carry through his plan to save Alitalia began to show results yesterday, hours before a decision was due on the airline's license to fly.

An all-Italian consortium ready to take on parts of the bankrupt firm agreed to return to the negotiating table and, after what it said were "clarifications" of its offer, Italy's biggest trade union federation backed the group's plans.

The apparent improvement in Alitalia's situation came amid unconfirmed reports that Air France-KLM was negotiating a stake of up to 25% in the consortium, led by Roberto Colaninno, the chief executive of the scooter manufacturer Piaggio.

Last week, the formerly communist CGIL trade union federation, which is close to the opposition, moved over to the ranks of the unions which were opposing the terms on offer.

But after signing a preliminary understanding yesterday with the consortium, the CGIL secretary general, Guglielmo Epifani, said they had reached an "absolutely positive overall agreement".

The deal also requires backing from unions representing pilots and flight assistants. But they also raised hopes of a settlement by calling a meeting of their members last night to discuss "new and interesting facts".

Prospects for bringing the pilots on board rose after talks with Berlusconi late on Wednesday. The head of the Italian civil aviation authority said last week he would have to ground Alitalia if the bankruptcy commissioner appointed to run the firm failed to present a credible rescue plan at a meeting yesterday.

On the assumption that Colaninno, as the head of the consortium, would enjoy government favor if the deal went through, Italian investors piled into shares in Piaggio and its holding company, Immsi. Shares in Immsi were suspended owing to the strength of their gains.