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Negotiations between Alitalia and Air France-KLM stopped

The negotiations between Alitalia, Air France-KLM, labour unions and professional associations were stopped as Alitalia announced. The deadline for reaching the effectiveness conditions set out in the agreement signed with Air France-KLM on 15 March 2008 was ended on 2 April and therefore, expired.

Maurizio Prato has resigned from his position as the Company’s Chairman and Director. The Board of Directors met yesterday (3 April) in order to take the necessary and opportune resolutions.

Air France-KLM accepts that there is no longer any basis for further negotiations

"When it submitted its final offer on 14 March this year, Air France-KLM indicated that the offer was contingent on prior agreement with the trade unions representative of the majority of the various categories of Alitalia employees (ground staff, flight crews); this agreement concerned the implementation of the Alitalia restructuring plan and its related severance measures," said the Groups in its statement.

"Air France-KLM know from experience that in the airline industry no restructuring plan has ever succeeded if it was not first agreed by employees. Consequently, Air France-KLM has always considered that the Alitalia industrial plan would have no chance of success unless it had the backing of the trade unions representing Alitalia’s workforce.

After several lengthy negotiation sessions, the trade unions formulated a new proposal corresponding to a totally different framework to the one in which Air France-KLM had restricted itself since Autumn 2007.

In formal terms, Air France-KLM was thus regretfully forced to accept that there was no longer any basis for further negotiations. This is because Air France-KLM has no mandate from its Board of Directors to follow up this new proposal. As regards content, the new proposal, which would involve retaining a number of activities generating large scale-losses within the Alitalia group, seems incompatible with the target of a rapid return to profit."

Chairman Spinetta said: "I regretfully acknowledge the breakdown in negotiations, which is none of our doing. This is a project I have profoundly believed in and continue to do so, because it would have ensured Alitalia a rapid return to profitable growth”.

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