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Alitalia board says it has cash to keep flying

Alitalia board says it has cash to keep flying

Alitalia's board said Tuesday that the ailing airline has enough cash to keep operating for the "very short term" but to keep flying urgently needs a large money injection _ like the one foreseen in the Air France-KLM offer.
The board said it had euro170 million ($267 million) in cash _ down from euro180 million at the end of February and not including a euro69 million ($108 million) tax credit _ but did not say how long that might last.
Air France-KLM broke off talks on its takeover offer last week citing demands by unions.
Analysts have said Alitalia, which has been losing euro1 million (US$1.6 million) a day and selling assets to stay afloat, could only keep operating until June on its own resources. EU regulations forbid the government from bailing the airline out, although would allow a bridge loan of the kind pledged last week by Finance Minister Tommaso Padoa-Schioppa in the event of an Air France deal.
The breakdown of talks last week with the Franco-Dutch carrier pushed Alitalia closer to bankruptcy, but the board, which met in Rome, stopped short of requesting bankruptcy protection.
Instead, it welcomed Air France's statement Monday that it was willing to renew its offer despite the impasse with unions. The board also welcomed a meeting Thursday between the Italian government and unions seeking to salvage the deal.
But with national elections looming Sunday and Monday, it appeared increasingly unlikely any decisive action on Alitalia's future would be taken until after a new government is in place.
Opposition leader Silvio Berlusconi, who has been leading the polls, has been pressing for Italian investors to step forward.
"I think there has to be a waiting period until after the elections are over and the new finance minister is put in place and we have a clear strategy from the Alitalia board as well," said Diogenis Papiomytis, an airline analyst with Frost & Sullivan.
Several Italian union leaders have indicated that they are willing to resume talks, although none have signaled whether they are willing to go along with the Air France-KLM plan as presented.
Air France-KLM Chairman Jean-Cyril Spinetta walked out on talks saying the unions counterproposal would make it impossible to turn the airline around quickly.
"After the election a deal with Air France is possible," Raffaele Bonanni, the head of the CISL union, one of Italy's largest labor confederations, was quoted as saying by La Repubblica daily. "There is a very high chance that this will happen."
Shares in Alitalia, which have swung wildly in recent weeks, have been suspended through Tuesday to see the outcome of the board meeting.
Air France-KLM's offer, which values the carrier at euro139 million ($216 million), calls for the layoffs of 2,120 Alitalia employees, the closing of the cargo unit, getting rid of some short-haul aircraft before adding new longer-haul planes and downgrading Milan's Malpensa airport from a hub.