Bankrupt Alitalia cancels 40 flights

ROME – Bankrupt Alitalia canceled 40 flights Wednesday after a small union called a four-hour strike against a rescue plan, as hundreds of workers protested at Rome's main airport. The Italian airline is fighting for its survival as unions balk at accepting terms of the rescue plan by potential investors, including longer hours, layoffs and reductions in routes and in the number of aircraft.

Alitalia's Web site warned passengers about the walkout by the Cub union. Affected flights included domestic routes and flights across Europe.

At Rome's Leonardo da Vinci airport, Alitalia workers marched holding banners against the plan, which is backed by the government, and shouting "Shame! Shame!" The protest caused further disruption to travelers.

The strike was the latest headache for the Italian government, which is trying to unload its 49.9-percent stake in Alitalia while keeping the airline from collapsing.

"Whoever calls a strike during negotiations shows great irresponsibility," Transport Minister Altero Matteoli told Sky TG24 TV.

Alitalia's new administrator, August Fantozzi, warned that either the unions sign a deal with the potential investors on Thursday or the company will go down.

If an agreement isn't reached on Thursday, "we'll have to bring the books to (bankruptcy) court," the Italian news agency ANSA quoted Fantozzi as saying. Alitalia's funds will last "for just a little."

The government was holding the latest in a series of meetings with union representatives at the premier's office Wednesday.

Italian Premier Silvio Berlusconi told reporters in Paris, where he met with President Nicolas Sarkozy, that the government's guarantees of 80 percent pay for up to eight years for 3,250 workers who would be laid off under a reorganization plan could not be extended to all of Alitalia's 20,000 employees.

The government and Italian investors are prepared to inject 1 billion euros ($1.4 billion) into the loss-making airline assuming unions go along with the deal. But the various unions have bickered among themselves over which concessions to make.

The rescue plan foresees the takeover of profitable assets by a group of Italian investors and a merger with Alitalia's main domestic competitor, Air One. The investors are also shopping around for one or more foreign airlines to take a minority stake.

Air France-KLM has expressed interest, but Berlusconi on Monday night also pointed to Lufthansa as an "ideal partner." Air France walked away from a deal last spring to buy the government's controlling stake following union objections and in the heat of a national election campaign during which Berlusconi pledged to find an Italian solution.