Alitalia's unions will hold talks with
the government on Monday on a rescue plan for the airline and
on job losses -- which a minister said could be under 5,000 --
after it sought bankruptcy protection on Friday.
Alitalia's long-awaited move comes after nearly two years
of hunting for a buyer and sets it up for rebirth as a smaller
airline alleviated from the baggage of debt and high labor
A group of 16 Italian investors led by turnaround expert
Roberto Colaninno is expected to confirm its interest to the
administrator Augusto Fantozzi sometime this week in assets of
Alitalia to be split off, such as planes and slots, newspapers
said this weekend.
And British Airways (BAY.L) could be interested along with
Air France-KLM (
newspaper said on Sunday, just over a week after an industry
source said the carrier would not consider a partnership with
On Sunday, British Airways said it did not comment on
The Italian investors could offer 300 million to 350
million euros for the Alitalia assets which would form the core
of a revitalized airline, as part of an investment which could
total 1 billion euros.
The government of Prime Minister Silvio Berlusconi amended
bankruptcy law and antitrust regulations on Thursday to
facilitate the rescue plan to create a new Alitalia.
The new carrier will dominate the key domestic route
between Milan and Rome as it absorbs competitor Air One, owned
by one of the Italian investors, Carlo Toto.
Alitalia and Air One are the two dominant airlines that
operate on that route. But antitrust authorities can now only
rule on tariffs, not on slots.
EU Monetary Affairs Commissioner Joaquin Almunia said the
solution has to conform to EU rules and be good for the company
and employees as well.
Brussels is still investigating a 300 million euros cash
injection from the Italian government made earlier this year,
which it thinks might be illegal state aid.
Italian Economic Development Minister Claudio Scajola told
Il Messaggero newspaper in an interview published on Sunday he
thought the plan would get approval from Brussels because it
did not involve state aid.
Intesa Sanpaolo, the bank hired to advise on the sale of
Alitalia, has said the rescue plan depends on agreement from
unions, who scuppered the last attempt to find a future for the
airline in a sale to Air France-KLM.
"The next four weeks will be crucial," Intesa Sanpaolo
Chief Executive Corrado Passera said on Friday.
Labour Minister Maurizio Sacconi said job losses could be
under 5,000 in an interview with La Repubblica newspaper on
Saturday -- less than the 6,000 to 7,000 that previous reports
The plan also calls for an international partner further
along the line for the new company.
Air France-KLM has now said it is ready to take a minority
stake in the revived Alitalia.
Newspapers at the weekend suggested it could take 20
percent to 25 percent stake. Il Sole 24 Ore newspaper said on
Saturday it could invest around 200 million euros.
Lufthansa has also been tipped as potentially interested.
The German airline, currently looking at Austrian Airlines, has
always said Italy remains an important market for it.
(additional reporting by Rhys Jones in London; Editing by
Consumer electronic makers are bracing
themselves for slower growth in the second half of this year
and in 2009, but count on consumers turning to home
entertainment amid tougher economic times and tighter budgets.
"When people don't have much money, they cut on big stuff
and buy things that make their lives a little bit better, like
consumer electronics," TomTom (
Vigreux said she expected the satellite navigation device
company to be largely unaffected by the slowing economy in
Europe and the United States, but retailers were being "very
careful" on inventory levels in the run-up to Christmas.
Consumer electronics makers from around the world have
descended on Berlin to showcase their products at the IFA
electronics fair which runs from August 29 to September 3.
Many companies count on the fair for new orders as
retailers shop for the upcoming holiday season, but are worried
that a gloomy macroeconomic environment is casting a pall over
"The overall market in 2008 is not very good and Europe is
even worse," Shin Ik Kang, president and CEO of LG (066570.KS)
A global economic slowdown, oil price increases and the
subprime crisis had taken their toll, Kang added.
Euro zone retail sales posted their biggest ever yearly
fall in June and British retail sales dropped at their sharpest
pace in at least 25 years in August.
Kang expects the TV market in Europe to be flat this year
and has seen some reluctance among retailers to place orders
since May. Still LG predicts it will outperform the market in
"We are seeing people are more sensitive to promotional
deals but have not seen signs of consumers turning to
third-tier brands," said LG Digital Display's Europe head, Chi
Lee also said she expected leading TV makers to intensify
price competition, especially the biggest brands such as Sony
(6758.T) and Samsung (005930.KS), the two leading LCD TV
makers, ahead of the Christmas shopping season.
DON'T SACRIFICE MARGINS
Japanese electronics maker Toshiba (6502.T), which also
sells LCD TVs, said companies should not sacrifice profit
margins for volume even if the weaker euro slows the growth of
Europe's consumer electronics sector.
"We're not planning to subsidize this exchange rate swing
at all. We'll either find ways of reducing the costs still
further or we may have to adjust prices upwards," said Alan
Thompson, Toshiba's executive vice president of computer
systems for Europe, the Middle East and Africa.
Thompson said retailers were facing pressure from the
economic slowdown and it was hard to predict where consumers
would cut spending, but Toshiba was well positioned with
alternatives to expensive rival high-definition video playback
Sony Chief Executive Howard Stringer said it was hard to
tell what effect an economic slowdown would have on consumer
spending. He expects the consumer electronics market to slow in
the second half but still sees double-digit growth in the TV
market this year.
"We have not seen an impact on consumer spending yet,"
Stringer said, adding people often sought solace in
entertainment during uncertain economic times -- citing the
popularity of cinemas during the depression of the 1930s.
Stringer said home entertainment products such as TVs and
Blu-ray DVD players were selling well.
"I see prices for Blu-ray devices to come down more and
more before Christmas," he added.
(Editing by David Holmes)
Oil and natural gas companies shut down
production across the Gulf of Mexico on Saturday to prepare for
the worst hurricane to hit the U.S. oilpatch since 2005, as
coastal refineries braced for possible floods.
Hurricane Gustav, now a dangerous Category 4 storm, roared
toward western Cuba on Saturday with 125 mph (205 kph) winds on
its way to the oil-rich Gulf of Mexico after a deadly pass
through the Caribbean.
Forecasters predicted Gustav would cross the Gulf of Mexico
and hit central Louisiana on Tuesday with the same force that
Hurricane Katrina delivered three years ago.
At least five refineries, with combined capacity of 1.12
million barrels per day (bpd) had reduced production in
Louisiana and Texas while oil companies were shutting down
offshore platforms and flying crews out of harm's way as
Hurricane Gustav churned toward the Louisiana coast.
The Louisiana Offshore Oil Port -- the only U.S. deepwater
port capable of offloading giant oil tankers, ceased operations
on Saturday, a spokeswoman said.
Energy interests say Gustav could be a reprise of 2005's
devastating hurricanes Katrina and Rita, which shut a quarter
of U.S. oil and fuel production and sent prices to record
"Plain and simple, Gustav is forecast to be a large and
powerful hurricane in the Gulf of Mexico, headed toward the
northern Gulf coast," said Richard Knabb, a senior hurricane
specialist a the U.S. National Hurricane Center.
The Gulf provides a quarter of U.S. oil output and 15
percent of natural gas production.
As of Friday, 6.62 percent of oil and 1.84 percent of
natural gas production was shut due to Gustav, according the
U.S. Minerals Management Service, which regulates offshore
production. The MMS will update shut production numbers on at 2
The nation's leading refiner, Valero Energy Corp (VLO.N),
said it had reduced production at its St. Charles, La.,
refinery, west of New Orleans. Valero also cut production at
its Port Arthur, Houston and Texas City, Texas, refineries.
ConocoPhillips (COP.N) said production at its 247,000
barrel per day (bpd) Alliance refinery near New Orleans was cut
back and some workers told to stay home.
Motiva Enterprises - a joint venture between Shell Oil
(RDSa.L) and Venezuela's state-owned Petroleos de Venezuela SA
(PDVSA), cut staff at its 236,000 bpd refinery in Norco,
Shell, the region's largest producer at 370,000 barrels of
oil equivalent per day, also said it was on its way to shutting
all offshore oil and natural gas production by Saturday
In addition, BP (BP.L) said all Gulf production would be
shut by midday Saturday.
Exxon Mobil Corp (XOM.N) said 5,000 barrels of oil output
and 50 million cubic feet per day in natural gas production was
shut by Saturday morning.
Enbridge (ENB.N) declared force majeure and told natural
gas producers to stop sending to its pipeline system, which
carries 6.72 billion cubic feet per day.
(Reporting by Erwin Seba, Bruce Nichols and Robert