Air France CEO explains Italian retreat to board

PARIS (Reuters) - Air France-KLM (AIRF.PA: Quote, Profile, Research) on Monday said its head had told the board of the Franco-Dutch airline why talks with Italian unions had broken down over its proposed takeover of Alitalia (AZPIa.MI: Quote, Profile, Research).

"(Air France-KLM Chief Executive) Jean-Cyril Spinetta is informing the board on the reasons that have led him to end talks," a spokeswoman for Air France-KLM said.

However, she declined to give details or say whether Air France-KLM's board had given Spinetta another mandate to pursue talks with the struggling Italian airline.

Italy's opposition leader Silvio Berlusconi, who is hoping to win the general election this month, has called Air France-KLM's offer unacceptable.

Last week, Spinetta failed to persuade Alitalia's unions to accept its takeover offer, which includes a 10 percent staff cut.

Union representatives said on Sunday they would be open to resuming talks with Air France but stressed a deal would take time to flesh out.

Air France-KLM shares were up 3.24 percent at 19.73 euros by 1412 GMT on Monday, helped by a wider rebound of the French stock market.

Alitalia shares are due to remain suspended until April 8.

(Reporting by Jean-Michel Belot, editing by Will Waterman)