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Alitalia rescuers list obstacles in way of turnaround - source

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Alitalia rescuers list obstacles in way of turnaround - source
FILE PHOTO: A view of the Alitalia Airbus A330-200 plane ahead of Pope Francis' departure from Fiumicino Airport to begin his visit to the African nations of Mozambique, Madagascar and Mauritius, in Rome, Italy September 4, 2019. REUTERS/Remo Casilli   -   Copyright  Remo Casilli(Reuters)
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ROME (Reuters) – Investors working on the rescue of Italian flag carrier Alitalia will send the industry ministry a list of obstacles standing in the way of the airline’s turnaround, one source close to the matter said, putting pressure on Rome to help with finalising a deal.

Infrastructure group Atlantia <ATL.MI>, railway company Ferrovie dello Stato, U.S. carrier Delta Air Lines <DAL.N> and the finance ministry have been discussing Alitalia’s rescue since July.

But with less than two weeks left to present a plan for the loss-making company, rescuers have laid out what they believe are the main stumbling blocks.

The first hurdle to overcome is getting a commitment from all sides to inject more funds if needed to recapitalise the carrier after an initial investment, the source said.

U.S. carrier Delta has so far resisted pressure from the Italian government to invest more than $100 million (£81.08 million), limiting its commitment to a 10% stake.

A second issue is the participation of Alitalia in a new cooperation agreement Delta has signed with Air France KLM <AIRF.PA> and Britain’s Virgin Atlantic over North American routes, the source said.

Another sticking point is how best to stem the airline’s losses, given it is not clear how many layoffs will be necessary to restructure the carrier and what the government may do to reduce the social impact of the restructuring.

Pilot and flight assistant unions ANPAC, ANPAV and ANP on Friday confirmed a 24-hour strike on Oct. 9 and said they had written to Industry Minister Stefano Patuanelli to express their concern.

“The latest developments … seem to weaken the chances of successfully concluding negotiations … over the relaunch of Alitalia,” they said.

Alitalia also risks burning through its cash before a rescue plan is agreed and approved by European authorities.

All those involved in the rescue were not immediately available for comment.

(Reporting by Stefano Bernabei; writing by Francesca Landini; editing by Louise Heavens)

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