On a wing and a prayer

tauringhuang.

Sep 20th 2008 | ROME
From Economist.com

Against all the odds Alitalia, Italy’s flag-carrying airline, is still in business

AFP
OPPOSITION politicians, independent analysts and even some right-wing opponents gave warning to Italy’s prime minister, Silvio Berlusconi, in March that he would be playing with fire if he chose to use Alitalia for electoral purposes. But he refused to listen. He made the preservation of the airline's italianità a centrepiece of his campaign to be re-elected as prime minister. And this week the lashed-up contraption he hoped would fulfil his promise to the voters exploded in his face. It was a turning point in the fortunes of a government that has lived a charmed life with the electorate up to now.

By the evening of Friday September 19th Italy's flag-carrying airline—once a symbol of the country's post-war revival—appeared to be drifting inexorably towards liquidation. Italy’s railway service reported a flood of bookings as the faith of passengers in the survival of Alitalia evaporated. At least 20 of the company's flights were cancelled, though airline officials insisted that it was for reasons unconnected with the crisis.

tauringhuang.

At a meeting in Milan on Thursday, the members of a consortium that Mr Berlusconi had tacked together to relaunch Alitalia withdrew a

tauringhuang.

Those that rejected the deal included four professional associations, representing pilots and flight attendants, whose power to decide the fortunes of Alitalia would have been severely limited by the consortium's insistence on a single contract for all employees. Importantly, they also included Italy's biggest trade-union federation, the once-communist CGIL, which was fearful of backing a deal that might then have been rejected by the workers.

The intransigence of some of Alitalia's staff perplexed many Italians: when news of the consortium's withdrawal was announced to informal assemblies in Milan and Rome there was cheering and applause. This came on a day when the world's financial markets were in turmoil and the Italian employers' federation forecast that the economy would contract by 0.1% this year.

Mr Berlusconi said the CGIL and pilots had a “very heavy responsibility”. He is right. But the reason Alitalia's employees behave in the way they do is that history has taught them that, no matter how dire the company's situation, the government of the day will always step in to save the airline. The last time this happened was in April when the treasury, at Mr Berlusconi's request, loaned Alitalia—already

tauringhuang.

The prime minister, asked if Alitalia would be allowed to go bust, replied: “Let's see. I want more details.” Augusto Fantozzi, the bankruptcy commissioner, gave warning last weekend that he could not guarantee the airline's flights beyond Monday because fuel suppliers were no longer ready to give Alitalia credit. Yet not a single flight has so far been denied fuel, so that now appears to have been a bluff.

Immediately after CAI's announcement, Mr Fantozzi declared that he would keep Alitalia's planes in the air until it was drained of cash (though how this squares with his obligation to its creditors is unclear). The latest estimates suggest Alitalia has enough money to keep flying until after the end of this month. But what remains to be seen is whether Italy's civil-aviation authority will allow it to so.

Mr Berlusconi has a lot to lose if the airline crashes. But he has already done pretty well out it. He did, after all, win the election.