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Air France-KLM, Alitalia chiefs meet as tie-up plan is finalised - source


MILAN (Thomson Financial) - Air France-KLM chairman Jean Cyrile Spinetta will meet his Alitalia SpA counterpart Maurizio Prato tomorrow in Paris as Air France finalises its business plan for taking over Alitalia, an industry source said.

Reports say the key issues to be discussed will be job cuts, including at Alitalia's uncompetitive affiliate AZ Servizi, and the downscaling of Alitalia operations at Milan's Malpensa airport.  The meeting tomorrow is "important yes. The due diligence is done or close to being done. Now the talk is of verifying various aspects of the plan and presenting it," the industry source said.

The plan and binding financial offer has to be presented by March 14, at the end of eight weeks of exclusive talks between the two airlines. The sale of the Italian state's 49.9 pct stake in Alitalia has to be approved subsequently by the government and regulators. Air France-KLM officials declined to comment, including on today's reports the French airline is concerned by Alitalia's losses and a 1.25 bln eur legal claim planned by Malpensa operator SEA.

Industry sources said the negotiations between the two airlines are going forward despite the SEA legal threat and the two groups are declining to discuss any concessions planned on downscaling Malpensa operations.

Finalising Air France-KLM's business plan for Alitalia will be followed by its presentation to Alitalia trade union representatives, which is unlikely to take place before next week, they said.  Union sources said there has been no contact so far with Air France or Alitalia either on AZ Servizi nor on Malpensa.

Mauro Rossi of the CGIL union said 3,000 direct and indirect Malpensa jobs are at risk from Alitalia's downscaling, adding the unions will meet SEA next week to discuss any SEA job cut plans.  No further strikes at Malpensa have been fixed after one earlier in the month over Alitalia's plans, he said.

Another source at the ANPAC pilots union said there is little political support for a rival bid from Italy's Air One airline, which failed recently to stop exclusive Air France/Alitalia talks.

Air One does not have the operational capacity to takeover Alitalia even if it has financial support from Intesa Sanpaolo SpA, he said.

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