Air France-KLM has offered to extend operations of Alitalia's freighter unit in a bid to win backing from unions for its planned takeover of Italy's ailing national airline.

The Anglo-Dutch carrier is due to meet union leaders Tuesday, after saying last week it would shut down Alitalia's all-cargo business as part of a restructuring aimed at returning the airline to profitability by 2011.

But now, Air France-KLM said it would keep three of Alitalia's five MD-11 freighters flying until the summer of 2010 on long-haul routes to Asia and North America.

Alitalia's freighter fleet posted losses of 71 million euros [$109 million] on revenues of $344 million in 2007.

Air France-KLM set a March 31 deadline for Alitalia to accept its $215-million takeover offer.

Prospects for the sale worsened after Silvio Berlusconi, Italy's opposition leader, said he would block the bid if elected prime minister in April. Polls show Berlusconi, a former center-right prime minister, heading for a victory in the April 13-14 general election.

The Italian government warned that Alitalia, which is losing $1.5 million a day, is just weeks away from running out of cash, raising the spectre of bankruptcy unless it is bought by Air France-KLM, the world's biggest airline by revenue.

Bruce Barnard
Journal of Commerce