Meanwhile, more turbulence at Alitalia

Germany’s Lufthansa just keeps expanding its corporate empire in Europe. It already owns Swiss International Airlines, and recently made deals to acquire the U.K.’s bmi as well as Belgium’s Brussels Airlines. And now the Austrian government holding company that owns 42 percent of Austrian Airlines has agreed to sell its stake to Lufthansa, subject to the successful conclusion of final negotiations. Air France/KLM was also interested, but the government said its bid did not arrive in time. In Italy, meanwhile, the fate of Alitalia is still uncertain. A government-backed rescue of the struggling carrier by a consortium of Italian businessmen is in the works, and the European Union last week approved the deal – if the airline pays back an emergency loan of $380 million given to it by the Italian government. But the deal also faces problems with Alitalia’s restive unions. Although union leaders tentatively backed the rescue plan – even though it will cost thousands of jobs and result in a shrinking of the airline – many rank-and-file workers don’t like it. Last week, many Alitalia pilots and flight attendants started staging wildcat walkouts, resulting in the cancellation of hundreds of flights.