Alitalia SpA moved closer to bankruptcy as Roberto Colaninno's investor group abandoned talks to buy the state-owned carrier because of union opposition. “The situation is worrisome and getting worse,'' Labor Minister Maurizio Sacconi said in Rome today after the negotiations broke down. “Alitalia won't be able to operate much longer if there aren't new developments.'' Italy has been trying to sell its stake in Alitalia, which lost more than $3 million a day in the first half, for more than two years. Union opposition scuttled an offer from Air France- KLM Group in April, the same month Silvio Berlusconi was elected prime minister after pledging to organize an Italian bid that now may be unraveling. The Colaninno-led bid proposed 3,250 job cuts and the sale of unprofitable assets including the airline's cargo and maintenance businesses. The offer links wages to productivity gains and would leave many Alitalia workers earning less, labor leaders said. The government had given unions a deadline of yesterday to reach an agreement, saying Alitalia would run out of cash this month and be bankrupt without an accord. “After seven days of meetings, there aren't conditions to continue negotiations,'' Colaninno's Compagnia Aerea Italiana said in an e-mailed statement. The unions ``don't seem to realize what a dramatic situation Alitalia is in,'' CAI said, adding that it hasn't formally withdrawn its offer. No further talks were scheduled, though the airline's government-appointed commissioner, Augusto Fantozzi, won't immediately start firing workers, Sacconi said. Alitalia declared insolvency last month and Fantozzi was appointed to oversee the sale or liquidation of assets. “This has become the latest act in the Alitalia soap opera and one has to hope that it's just some arm wrestling between the two sides and that they will get back to negotiations,'' said Patrizio Pazzaglia, a money manager.
