Alitalia flight attendants reluctantly signed on Monday to a rescue plan for the Italian flagship, pulling it back from the brink of bankruptcy and shifting the focus to the search for a foreign partner.
The plan's reluctant approval by the last two of the airline's nine unions ended nearly a month of negotiations that saw the the Italian Air Company (CAI) investor group withdraw its billion-euro (1.45 billion dollar) bailout offer at one point.
CAI now faces more hurdles between now and the November 1 launch date of the new Alitalia.
The airline is flying on a temporary licence awarded in September after it was put under special administration.
"A lot of work" is needed for the airline to pass muster with the civil aviation authority ENAC, the agency's president Vito Riggio said.
In addition, CAI, whose government-brokered offer is good until October 15, must find a foreign partner before it can solidify its business plan for a streamlined Alitalia.
Negotiations with the two interested outsiders, Air France-KLM and Lufthansa, will be "brief, but I cannot say how long" they will go on, CAI administrator Rocco Sabelli said Sunday.
"Starting this week, we will be able to sit around a table with each of them to define the routes, synergies (and) advantages in the interests of the customers and shareholders," he said.
Many union leaders are overtly in favour of Germany's Lufthansa because it operates from more than one hub, like Alitalia, whose Milan hub has seen drastic cutbacks.
The regional Northern League party, the leading coalition partner in the government of conservative Prime Minister Silvio Berlusconi, also hopes Lufthansa might step in and resuscitate the Milan hub.
Meanwhile, Alitalia faces rulings from the European Commission over a 300-million-euro loan it was awarded in April as well as changes to bankruptcy and antitrust laws enabling it to merge with Italy's number two airline Air One, which is also faltering.
CAI will rehire some 12,500 workers, while laying off some 3,000.
The government has promised compensation over seven years for those who lose their jobs.
Air France-KLM has said it is ready to take a minority stake of between 10 and 20 percent while press reports said Lufthansa wants as much as a 49 percent stake.
Berlusconi promised during the campaign ahead of elections he won in April to keep Alitalia in Italian hands, vowing to block a takeover by Air France-KLM that was then on the cards.
Alitalia, 49.9 percent state owned, is losing about three million euros (4.3 million dollars) a day and has debt of about 1.2 billion euros, which is now to be shouldered by the Italian taxpayer.
Air France already holds a two percent stake in Alitalia.
In the union negotiations, a first breakthrough came last Thursday when Italy's most powerful union, the CGIL, signed on after obtaining last-minute concessions on pay, leave and contractual issues.
The daily La Repubblica argued on Saturday that Alitalia "does not have the critical mass in financial terms or the operational capacity to hold out against its global competitors."
It said Germany saw the debate over keeping the airline in Italian hands as pointless given Europe's overall competition with emerging Asian markets.
Source: AFP Global Edition