Lufthansa makes moves on Alitalia bid to rival Air France-KLM

Rome: German airline Lufthansa met Alitalia's unions yesterday to discuss a possible stake in the struggling airline as Italy pushed to wrap up labour talks to seal an investor bailout.

Rivals Lufthansa and Air France-KLM are jostling to grab a foothold in the attractive Italian market through an alliance with Alitalia after its proposed relaunch by the CAI consortium of Italian investors buying its best assets.

The investor deal lurched back to life on Thursday after winning the backing of four major unions including Italy's biggest, and talks continued yesterday to persuade pilot and flight assistant unions to get on board.

The Italian government notched up another victory by convincing the Anpav flight attendants' unions to back the deal.

Italy's labour minister said on television he was hopeful of clinching support from the remaining unions by an 1100 GMT deadline yesterday, but that the CAI consortium would press ahead with its offer even without their backing. CAI has said its bid will now be valid until October 15.

The four major unions backing the bailout met Lufthansa chief executive Wolfgang Mayrhuber yesterday and they said he had expressed the carrier's interest in Alitalia, UIL union leader Luigi Angeletti told Italian television.

Lufthansa declined to comment specifically on its interest in Alitalia but said Mayrhuber was in Rome at the Italian government's request to discuss the stricken Italian carrier.

Lufthansa has long said it has its eye on the Italian market but the latest meeting is its strongest demonstration yet of interest in striking an alliance with Alitalia.

Sources said Lufthansa is mulling whether to take a 20 per cent stake in Alitalia expected to be up for grabs for a foreign investor. A separate union source said the German airline was interested in a bigger stake.

Alliances drawn

Rival Air France-KLM, whose deal to buy Alitalia collapsed this year over union opposition, is also eyeing a stake of as much as 25 per cent in the CAI consortium taking over Alitalia, sources have said.

But it could face problems with some Alitalia unions openly supporting Lufthansa and signs that Prime Minister Silvio Berlusconi would also favour a tie-up with the German carrier after opposing Air France-KLM's deal in the past.