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Alitalia crisis keeps Italian PM at home

  • Story Highlights
  • Alitalia has until Thursday to present financial report to Italian aviation authorities
  • Bankrupt Italian airline could have license to fly revoked
  • Authorities also set Sept. 30 deadline for investor offers for ailing carrier
  • Unions last week rejected $1.4B offer from investors because of job cut fears
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ROME, Italy (CNN) -- Italian Prime Minister Silvio Berlusconi canceled his trip to attend this week's United Nations General Assembly so he can personally follow the crisis involving national air carrier Alitalia, senior government officials said Tuesday.

Italian Prime Minister Silvio Berlusconi

Italian Prime Minister Silvio Berlusconi had been scheduled to fly to New York.

The assembly at U.N. headquarters in New York, which draws heads of state from around the world, opened on Tuesday.

Italy's ailing Alitalia has until Thursday to present a report on its state of finances to the Italian civil aviation authority or face a suspension of its license to fly.

Alitalia is already operating under a temporary license.

Vito Riggio, head of Italy's civil aviation authority ENAC, indicated Monday that the airline's license could be suspended by the end of this week.

The potential grounding of Alitalia would be a major embarrassment for Berlusconi, who was elected earlier this year and pledged to save the national carrier by keeping it in Italian hands.

Alitalia's special commissioner Augusto Fantozzi has set a September 30 deadline for interested buyers to submit bids for Alitalia or at least portions of it.

"If by then I realize that there is no other viable option on the table, I would be the one requesting the license be suspended," Fantozzi said.

Alitalia has enough money to pay salaries until the end of this month, he told ENAC officials.

Fantozzi was put in charge of Alitalia when the company declared bankruptcy at the end of August.

Meanwhile, a group of pilots and flight attendants in favor of accepting a deal for the airline proposed by a group of Italian investors organized a small demonstration at Fiumicino airport in Rome on Monday to show there is support for the plan among pilots.

Last week, the trade union representing the largest number of pilots and cabin staff failed to sign the deal, forcing the investors to withdraw their proposal. Instead, the union made a counteroffer, essentially saying they will work longer hours for the same salaries, but requested fewer layoffs.

The board of directors voted to turn down their counteroffer.

While the deal is no longer on the table, there are reports investors would be willing to propose it again should the unions agree to sign it.

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This latest deadline will increase the pressure on the trade unions to accept the offer of €1 billion ($1.4 billion) or face massive layoffs.

Berlusconi said accepting the offer is the only possible way to save the airline. On Tuesday, he met with the group of investors to discuss the possibility of reactivating the offer should the unions agree to sign it.

All About Alitalia-Linee Aeree Italiane SpASilvio Berlusconi

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