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Old November 12th, 2007, 07:54 AM   #181
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This thread makes me sad but if they're always losing money something needs to be done. Has anyone else here flown Alitalia? I had a round trip flight from Rome to Catania for a day trip on their MD-80's and the flight experience each way was excellent.
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Old November 13th, 2007, 04:11 PM   #182
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Quote:
Originally Posted by FM 2258 View Post
This thread makes me sad but if they're always losing money something needs to be done. Has anyone else here flown Alitalia? I had a round trip flight from Rome to Catania for a day trip on their MD-80's and the flight experience each way was excellent.
These types of stories involving national carriers has been quite common of late as the industry goes through fundamental change. Open skies, deregulation, and the emergence of low cost carriers have prompted changes to the industry, and have inflicted a lot of casualties among old legacy and new carriers.
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Old November 14th, 2007, 01:46 PM   #183
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Alitalia third-quarter losses narrow; no update on search for a new owner
13 November 2007

ROME (AP) - Alitalia SpA's pretax loss narrowed slightly in the third quarter, the Italian state-controlled airline said Tuesday, but it gave no update on its prospects for getting a new owner.

Italy's largest airline said its pretax loss in the quarter that ended Sept. 30 was cut to 57.6 million euros ($84.1 million) from 66.4 million euros a year earlier. The airline has endured tough competition from low-cost airlines and flight cancellations due to labor strikes.

But the market's real focus was on news of the Italian government's efforts to sell its 49.9 percent stake in the airline. Alitalia Chairman Maurizio Prato had said news would come by mid-November.

The government has been struggling to make a deal. A tender organized by the government was scrapped in July after all the potential buyers gradually pulled out, saying the terms were too stringent.

After the auction collapsed, the government appointed Prato, the third person this year to lead the airline, with the specific goal of finding a buyer.

Last month, Alitalia said it had six potential suitors, including leading European carriers Air France-KLM, Deutsche Lufthansa AG and Air One, Italy's No. 2 carrier in terms of passengers served.
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Old November 15th, 2007, 03:02 PM   #184
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Lufthansa Plan For Alitalia Focuses On Malpensa, Cuts -Report
15 November 2007

MILAN (Dow Jones)-- Deutsche Lufthansa AG's (DLAKY) plan for Italy's ailing Alitalia SpA (AZA.MI) would focus on strengthening Milan's Malpensa airport and reducing Alitalia's fleet by 50 planes, Italian daily Il Sole 24-Ore reports Thursday without citing sources.

Under Lufthansa's plan, Malpensa would become Italy's main airport for intercontinental flights, while Rome's Fiumicino would be the main hub for Africa and the Middle East.

The plan also foresees a "substantial restructuring" in terms of jobs, Il Sole reports.

Alitalia, searching for a buyer for the government's controlling stake, is now in talks with several possible investors including domestic rival Air One, long-time commercial partner Air France-KLM (AKH), Germany's Lufthansa and Russia's Aeroflot (AFLT.RS).

Italian Transport Minister Alessandro Bianchi said Wednesday that the sale of the government's controlling stake in Alitalia would be completed very soon.
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Old November 26th, 2007, 06:02 PM   #185
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Italy Min Rules Out Delay Of Alitalia Sale To 2008
26 November 2007

MILAN (Dow Jones)--Italian transport minister Alessandro Bianchi Monday ruled out a possible delay of the sale of Italian carrier Alitalia SpA (AZA.MI) until next year.

"I believe it is a matter of days," Bianchi said when asked to comment on the soon-to-be announced sale of Alitalia. Bianchi said the government plan is to sell the majority stake it holds in Alitalia by the end of this year.
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Old November 29th, 2007, 03:59 AM   #186
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Reports: Prodi says he thinks Alitalia will have a buyer by Christmas
27 November 2007

ROME (AP) - Italy's premier believes troubled national carrier Alitalia SpA would find a buyer by Christmas, according to news reports Tuesday.

The government has been struggling to sell its 49.9 percent stake in Alitalia, for which potential suitors include Germany's Deutsche Lufthansa AG, Air France-KLM and Air One, Italy's No. 2 carrier by number of passengers after Alitalia.

On Sunday, Lufthansa CEO Wolfgang Mayrhuber was quoted as saying in an interview with the Frankfurter Allgemeine Sonntagszeitung newspaper that the airline would likely decide by the end of the year whether to make a bid for Alitalia.

Asked by journalists Tuesday if a Christmas timeframe was accurate for finding a potential partner, Premier Romano Prodi responded: "I think so," the ANSA and Apcom news agencies reported.

A tender organized by the government was scrapped in July after all the potential buyers gradually pulled out, saying the terms were too stringent. After the auction collapsed, the government appointed a new chairman, Maurizio Prato, to lead the airline, with the specific goal of finding a buyer.

Alitalia has been hurt by high operating and fuel costs, stiff competition from budget airlines and persistent labor unrest. Its net loss widened to 626 million euros ($917.34 million) in 2006 from 168 million euros ($246.19 million) a year earlier after it booked a hefty write-down to cover the depreciation in value of its aging fleet.
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Old November 30th, 2007, 06:48 PM   #187
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Strike halts Alitalia flights from Heathrow

(30 November 2007)

Alitalia flights from Heathrow to Rome and Milan Malpensa have been cancelled today along with inbound services during a strike by Italian transport unions.

The work stoppage at the airline was expected to last four hours between 11am and 3pm UK Time, although trains, buses and ferries across Italy will halt for eight hours in a strike against cuts in public services. Staff at car rental firms also stopped work.
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Old November 30th, 2007, 06:51 PM   #188
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Italy's Prodi says three contenders for Alitalia, including Air France

MILAN (Thomson Financial) - Italy's prime minister Romano Prodi said that Air France-KLM is one of three contenders interested in taking control of Alitalia SpA.

Speaking at the Franco-Italian summit in Nice, Prodi said that Alitalia was not discussed.

But he added that in a few days the experts will present their opinion on who the partner should be to enter into exclusive talks with Alitalia.

'Among these three contenders there is Air France (nyse: AKH - news - people ),' he said.

The other two partners identified by government sources are Deutsche Lufthansa AG (other-otc: DLAKY.PK - news - people ) and Italy's Air One airline, which has support from Intesa Sanpaolo SpA.

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Old November 30th, 2007, 06:54 PM   #189
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Quote:
Originally Posted by MALAYSIAN View Post
(30 November 2007)

Alitalia flights from Heathrow to Rome and Milan Malpensa have been cancelled today along with inbound services during a strike by Italian transport unions.

The work stoppage at the airline was expected to last four hours between 11am and 3pm UK Time, although trains, buses and ferries across Italy will halt for eight hours in a strike against cuts in public services. Staff at car rental firms also stopped work.
That's part of :

Italy hit by nationwide transport strike

ROME, Nov 30 (Reuters) - Planes, trains, buses and ferries came to a halt in Italy on Friday as workers across virtually all transport services staged a nationwide strike.

Transport strikes are common in Italy but local media said Friday's protest was the first on such a scale for 25 years, with even cable cars, funeral hearses and highway breakdown vehicles grinding to a halt.

In most cities, public transport stopped at around 9 a.m. local time (0800 GMT), forcing many commuters to leave early for work. National carrier Alitalia cancelled more than 200 flights.

More than 160 flights were cancelled at Rome's main Fiumicino airport alone and railway service was hard hit in several parts of the country, with almost all trains cancelled in Florence.

Trains and boats crossing the Straits of Messina connecting Sicily to the mainland also ground to a halt. Subway services in Rome and Milan were suspended.

Workers are protesting cuts to the sector in the 2008 budget and the lack of investment in transport. Unions have threatened more protests if their concerns are not addressed.

"We are united, at least I believe. People are with us," said Giorgio Martello, a bus driver.

Major Italian unions said a high percentage of transport workers adhered to the strike, with the rate at 100 percent in many areas.

Commuters put on a brave face.

"I believe they are right to strike, even if it creates disruption," said Filippo Mainardi, hoping to catch an early train at Rome's main station.

For people in the capital, the only consolation was the end of a protest by taxi drivers that had paralysed the centre of the city for two days.
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Old November 30th, 2007, 06:54 PM   #190
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Euroshares outlook - up following gains on Wall St, Alitalia, Iberia in focus

LONDON (Thomson Financial) - Europe's leading exchanges are expected to open with gains for a third straight session following an advance on Wall Street overnight, with Alitalia and Iberia stepping into the spotlight again as their fates are left undecided.

Last night, Wall Street closed higher after weak labour and housing reports stirred hopes that the Federal Reserve will cut rates again.

The Dow Jones Industrial Average added 22.28 points or 0.17 pct to 13,311.73, while the broader S&P 500 rose 0.70 points or 0.05 pct to 1,469.72.

The technology-laden Nasdaq ended 5.22 points or 0.20 pct higher at 2,668.13.

Asian markets largely mirrored the development on Wall Street and the Nikkei 225 advanced 166.93 points or 1.08 pct to 15,680.67, while the Hang Seng gained 177.53 points or 0.62 pct to 28,660.07.

Oil prices spiked early then fell back somewhat after a fire broke at an Enbridge Energy pipeline carrying crude from Canada to the US. Light, sweet crude for January delivery rose 39 cents to settle at 91.01 usd a barrel in choppy trading on the New York Mercantile Exchange.

Today, some volatility is expected as US companies close their books on the last day of business for this full fiscal year.

Back in Europe, the fate of Italian airline Alitalia is left undecided as Air France-KLM said it will not get involved in an acquisition of the group or its Spanish peer Iberia unless its goal of raising after-tax return on capital employed to 8.5 pct in 2009-10 from 7 pct in 2007-08 is unaffected by the deal.

In the oil and gas sector, EDF and Enel are in focus as Enel CEO Fulvio Conti confirmed last night that he will be in Nice today where the Italy-France summit is taking place. The statement added to speculation that an agreement between the groups is likely to be signed at the event today.

Yesterday, France's President Nicolas Sarkozy said the French government will sell a 3 pct stake in EDF for around 5 bln eur to help finance French universities.

Over in the German market, mobile phone supplier Balda is in focus after US investor Guy Wyser-Pratte said owners of Balda AG, in which he also holds shares, are likely holding talks to sell a stake in the company, according to Financial Times Deutschland. 'I am certain there are such talks,' Wyser-Pratte told the newspaper, without being more specific.

Meanwhile, among pharmaceuticals Sanofi-Aventis and Astellas Pharma are of interest as they will restructure their Japanese joint venture FSA. Under the new plan, Sanofi-Aventis will get certain rights to insomnia drug Myslee while the venture's other drugs, notably Primperan, Dogmatyl and Gramalil, will be sold exclusively by Astellas, Sanofi-Aventis said.

And in earnings news, Portugal's Sonae SGPS said its pro-forma net profit at its soon to be spun off Sonae Capital unit rose 23.8 pct in the nine months to September to 13 mln eur from 11 mln a year earlier.

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Old November 30th, 2007, 06:55 PM   #191
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Ryanair sues EU, alleges failure to investigate Italian state aid to Alitalia
30 November 2007

DUBLIN, Ireland (AP) - Ryanair Holdings PLC filed its fifth lawsuit Friday against the European Commission, this time alleging that the European Union's executive arm has failed to investigate state aid to struggling Italian airline Alitalia.

Ryanair, the No. 1 no-frills airline and a frequent critic of EU regulators, filed all five lawsuits this month at the European Court of First Instance in Luxembourg. Its previous suits allege an EU refusal to investigate Ryanair complaints about government subsidies that benefit Air France, Germany's Lufthansa, Greece's Olympic Airlines and Alitalia subsidiary Volare.

The Ryanair legal barrage appears inspired, in part, by a desire for retaliation against EU authorities, who have taken up other airlines' complaints alleging unfair business practices by Ryanair.

EU competition authorities are probing several of Ryanair's deals with small regional airports from Finland to Sardinia. Their latest case, announced Wednesday, challenges Ryanair's contract for operating flights to Pau, southwest France. In most cases, Ryanair is accused of benefiting from contracts subsidized by local governments or chambers of commerce seeking to put their far-flung regions on the tourist and business map.

In June, EU competition chiefs also rejected Ryanair's plans for acquiring Irish rival Aer Lingus, their first such refusal following approvals of four other airline mergers.

Ryanair Chief Executive Michael O'Leary accused the Italian government of giving Alitalia euro1.7 billion (US$2.5 billion) in illegal benefits. He said Ryanair complained about the practice in 2005 but nothing had happened.

"The ongoing state aid to Alitalia is a perfect example of the (European) Commission's bias towards inefficient national airlines," O'Leary said.

He said Alitalia was losing more than euro400 million (US$590 million) annually "and the Italian government continues to illegally bail it out."

"We are calling on the commission to end its discriminatory and biased approach to state aid enforcement, to start promoting competition and consumer choice, and to put an end to this scandal of unlawful state aid to flag carrier airlines," he said.
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Old December 8th, 2007, 05:35 PM   #192
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Contest for Alitalia tests "Italian solution"

ROME, Dec 7 (Reuters) - The battle to buy Alitalia will turn on whether the ailing airline prefers an Italian solution appeasing unions and politicians, or the stronger prospect of a turnaround offered by joining a larger rival, analysts say.

After a year on the block, Alitalia on Thursday received offers from Air France-KLM and domestic rival Air One for the 49.9 percent stake held by the Italian state.

A third offer from a group led by an Italian lawyer may not proceed since it was ruled out by Alitalia previously for not proving it had the funds to pull off a deal.

Alitalia is expected to identify a bidder for exclusive talks next week and analysts say the choice is far from obvious.

The Air One choice is seen as politically expedient, but Air France with its financial muscle and rigorous approach is seen by some analysts as more likely to restore Alitalia to long term health.

"With this decision we will see whether they are working for the short-term or the long-term," said Nicolo Nunziata, analyst at J&C Associati in Milan. "The meaning of this decision will be important -- Air France would be a move for the long-term and Air One for the short-term."

The price offered is expected to play a less decisive role because Alitalia's losses and inefficiency mean it is unlikely to garner bids anywhere close to its 1.1 billion euro market value, analysts say. It also has 1.2 billion euros in debt.

Analysts also warn that having two serious bidders in the fray does not mean a deal will be sealed and the sale could yet fall apart again, just as a previous auction did in July.

ITALIAN OPTION

Air One is likely to be favoured by labour unions and politicians as it would keep Alitalia in Italian hands and ensure the politically useful -- but expensive -- strategy of keeping twin hubs in Rome and Milan is continued.

Alitalia's decision in August to scale back its Milan hub set off a storm of protests from regional politicians. Air One says it will maintain the two hubs, while Air France says it will ditch the Milan hub to focus on Rome.

But analysts raise doubts about Air One's ability to turn round an airline that loses more than a million euros a day or whether, as an Italian company, it can sidestep the same political interference that plagued Alitalia.

Despite its global ambitions, Air One is dwarfed by Air France-KLM. The world's largest airline by sales is 37 times larger by revenue and its aircraft fleet is 10 times bigger.

Air One has tried to counter doubts by promising to invest 4 billon euros in Alitalia and winning the backing of top banks including Intesa Sanpaolo, Goldman Sachs, Morgan Stanley and Nomura. It has also played up its Italian credentials and says its plans are for the long term.

"They are very convinced on this deal and they need it to survive," said Oliviero Baccelli at Bocconi University's transport economics research centre.

Still, analysts say a deal with Air France-KLM is the safer bet for Alitalia to stem the bleeding that has brought it close to bankruptcy before and led its chairman to call it "comatose".

" Air France-KLM are the most suited investor to take over Alitalia, more so than Lufthansa because they've gone through the process of merging two totally different airlines," said Diogenis Papiomytis, aviation consultant at Frost & Sullivan.

Air France has also made it clear it will not do a deal that leaves it short of its profit and return targets and analysts expect it to be more aggressive than Air One in cutting jobs and streamlining the airline -- both politically uncomfortable.

But Italy's persistent failure to turn around Alitalia may mean it is time to leave it to a new player, says Nunziata.

"If the old road is always wrong, try a new one," he said.
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Old December 13th, 2007, 04:30 AM   #193
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Italy takes more time to pick buyer for Alitalia

ROME, Dec 12 (Reuters) - Italy's government did not pick its preferred candidate to buy Alitalia as expected on Wednesday, leaving both Air France-KLM and domestic rival Air One still in the fray to buy the ailing airline.

After an intense media buildup to the high-level government meeting billed as decisive for Alitalia's fate, Italy's transport minister played it down as just a discussion of ideas.

"It was a meeting with an exchange of thoughts, there will be others in coming days," Alessandro Bianchi told reporters after it ended just before 11 pm local time (2200 GMT).

It came hours after he told Italian radio that Prime Minister Romano Prodi and his top ministers would decide on Wednesday on a buyer for the money-losing airline Italy has hawked for a year. Other ministers who attended departed without saying a word.

Alitalia's board is set to meet on Thursday. But it is unclear if it will identify a bidder for exclusive talks as planned since it was expected to rubber-stamp the choice made by the government, which owns 49.9 percent of the airline.

Air One, run by Italian businessman Carlo Toto and backed by the country's biggest retail bank, Intesa Sanpaolo , is the favorite of state-owned Alitalia's troublesome unions, regional politicians and business leaders.

But Air France-KLM, the world's largest airline group by revenue, is seen by analysts as having the strategic savvy and financial clout to pursue long-term restructuring at Alitalia, which bleeds over 1 million euros a day.

A third offer for the airline from a little-known group advised by an Italian lawyer is not expected to pose a threat, as it was ruled out last month for lack of funds.

POLITICS OVER PRICE?

Despite Alitalia's financial woes, the airline has the attraction of its dominance of the lucrative route for business travel between Italy's financial center Milan and Rome.

Analysts say political interests and strategic considerations will play a greater role in the final decision than the price offered, which is expected to be well below Alitalia's 1.1 billion euro market value.

It also carries 1.2 billion euros of debt.

The airline has said it would have enough money for the next year if it sold assets -- which is just as well, as the European Union earlier this year banned any more state aid.

Italy put the airline up for sale in December last year and in a first auction for the state's stake, the government stipulated that any buyer would have to retain Alitalia's Italian identity. But Prodi has now said Alitalia should go to the best bidder, with Italian ownership a secondary issue.

And Alitalia Chairman Maurizio Prato has said Air France's plan appeared clearer than that of Air One and more closely mirrored his own ideas for restructuring the airline.

The winning bidder would have to launch a tender offer for all Alitalia shares after completion of talks with the airline, a government source said.

That means the losing bidder in this round could still return to the game by launching a superior counterbid at that stage, the source said.

Air One has said that it would cut about 3,700 jobs and that investment banks backing its bid -- which aside from Intesa include Goldman Sachs Group , Morgan Stanley and Nomura Holdings Inc -- could take stakes in Alitalia.

Fewer specifics are known on Air France's offer, although the Franco-Dutch carrier has said its intentions echo those of the Italian airline's own restructuring plan unveiled in August.

Shares of Alitalia closed up nearly 3 percent at 0.88 euros ahead of the government meeting.
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Old December 18th, 2007, 12:15 PM   #194
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Shares in Alitalia plunge as details emerge on competing bids
17 December 2007

MILAN, Italy (AP) - Air France-KLM and Italian airline Air One SpA have confirmed some details of their competing bids for Italy's struggling national airline Alitalia, both promising to increase capital and modernize the fleet while laying off workers.

Alitalia's board will meet Tuesday to select which bidder will enter exclusive talks for the government's 49.9 percent stake in the airline -- a year after the government announced its intention to offload the money-losing carrier.

Analysts said the key difference in the bids would be the ability to see through a complicated restructuring.

Air One, Italy's second-biggest airline with a one-third market share, said Monday that it will bid euro0.01 (US$.01) a share, and plans a total investment of euro5.3 billion (US$7.63 billion) by 2012, including a capital hike of at least euro1 billion (US$1.44 billion) for the ailing carrier.

Air One aims to make Alitalia Europe's fourth-largest airline, breaking even by 2009, and will focus on renovating the fleet, investing euro3 billion (US$4.32 billion) over the next five years to buy 130 new planes. The new aircraft will include 90 Airbus A320, 20 Airbus A330 and 20 regional planes.

Renewing the fleet would be a priority, with plans to buy 130 new aircraft at a rate of 26 a year, Air One chairman Carlo Toto was quoted as saying by the newspaper Corriere della Sera.

"Alitalia is run today with old aircraft that have very high fuel and maintenance costs, besides offering a low quality of service," Toto told Corriere della Sera.

About 2,000 Alitalia employees would be laid off as the two airlines merge, Toto said.

Air France-KLM, meanwhile, confirmed details of its bid, saying it would make an immediate injection of euro750 million (US$1.08 billion) in new funds if selected as Alitalia's preferred buyer. The money would be raised from a capital increase open to all shareholders and guaranteed by Air France-KLM.

The Franco-Dutch carrier said the funds would be used to revamp cabin design, in-flight entertainment and ground services "to restore Alitalia's image and its stature as an international company."

Air France-KLM also placed a priority on renewing Alitalia's fleet, with plans to replace Alitalia's Boeing 767s and MD80 aircraft.

The Air France release did not mention its share price offer.

Analyst Diogenis Papiomytis with Frost & Sullivan said that while Air One may be more appealing as an Italian partner, Air France-KLM has the experience needed to engineer a complicated takeover. On that score, Air One is disadvantaged by being a smaller player.

"Obviously the important thing is they have the financial resources to turn Alitalia to profitability in the longer term," Papiomytis said. "Obviously, you need a long-term business plan and Air France-KLM have the financial resources to back that kind of play.

"They also have the long experience of merging two airlines," he said.

But there is also growing political pressure to keep Alitalia in Italian hands. The Air One bid is backed by Intesa Sanpaolo SpA.

After opening 1.7 percent higher at euro0.77 (US $1.12), Alitalia shares immediately turned lower and had to be suspended by the Milan stock exchange for excessive losses. They closed down 4.9 percent at euro0.72 (US$1.04).

Air France-KLM shares fell 3.9 percent to euro23.14 (US$33.57) in Paris.

The government announced its plans to sell a stake in Alitalia a year ago, but the attempts have run into trouble. A government auction was called off this summer after bidders walked away after they weren't allowed access to Alitalia's financial details and were not guaranteed full control of the airline.

No conditions have been announced on the current sale, although the winner will have to follow a new business plan adopted in July, which includes plans to focus on one hub, cut unprofitable routes and reduce the number of workers.

The winning bidder will take over an airline that has been losing between euro1 million and euro2 million (US$1.4 million and US$2.8 million) a day, and is battered by worker strikes while facing other conditions weighing down the industry, namely competition from budget carriers and high fuel costs.

Despite being unprofitable, Alitalia has a strong route network attractive to an airline investor, analysts note.

------

AP Business Writer Emma Vandore in Paris contributed to this report.
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Old December 18th, 2007, 03:13 PM   #195
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Regarding the Alitalia bid deal, I see the SQ 'involvement' very suspicious.

I think SQ has become a very influential player in Star Alliance, and it probably saw LH's Air One showing up a weak bid and did not want Skyteam to become too strong. It wouldn't bode well for LH nor SQ or any Star carrier.

I see the SQ 'involvement' as a warning to LH, and by extension, Air One, to take the bid of Alitalia seriously for the greater good for Star Alliance.

I find Star's policy is to grab as many markets as possible.
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Old December 18th, 2007, 05:40 PM   #196
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Star Alliance wants market share, and is willing to forgo quality and branding to get it. I was quite surprised they'd want Air India, which is not exactly a good reputation airline for service and timeliness.

But then, Alitalia is part of Skyteam.
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Old December 24th, 2007, 04:51 AM   #197
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N. Italy Officials Unite Vs. Air France
23 December 2007

MILAN, Italy (AP) - Officials in northern Italy are uniting in opposition to Air France-KLM's bid for ailing Alitalia SpA, which would make Rome the nation's only hub at the expense of Milan.

The Air France plan -- which the Alitalia board tipped Friday as its preferred bidder over Italian airline Air One SpA -- would do away with Alitalia's two-hub system, one at Rome's Leonardo da Vinci airport and the other at Milan's Malpensa.

Having a hub in Milan has been fiercely defended by northern politicians, but has been criticized as too expensive and impractical. Alitalia's board, under chairman Maurizio Prato, has already signaled its intention to cut traffic to Malpensa.

The Northern League -- a party with a strong regional identity -- has threatened strikes and blockades in opposition to the Air France bid.

David Boni, a northern League official, said the Air France-KLM plan would "put out of the game the only hub that could compete on an international level," while costing the north jobs, the news agency ANSA reported Sunday.

Lombardy regional president Roberto Formigoni called the board's decision "unacceptable," but noted that the ultimate choice of a preferred bidder for the government's 49.9 percent stake will be made by Prime Minister Romano Prodi's government next month.

He urged Rome not to "hide behind the board's decision," saying it "risks playing with fire ... if it abandons the most important territory in the country."

Guglielmo Epifani, leader of the CGIL labor confederation, came out Sunday against the Alitalia board's choice, citing the failure to guarantee Malpensa's future or to lay out plans for Alitalia's domestic routes.

"These are the problems that require a national operator to confront," Epifani said, according to ANSA. "That isn't simply a matter of the nationality of the company, but rather to have a response to these concerns."

Under Air France's plan, Rome's Leonardo da Vinci airport would be integrated into the Air France-KLM hub network as the primary airport for travelers to and from Italy, and would serve as a gateway to southern and eastern Europe and northern Africa, the Alitalia board statement Friday said.

"The new group, thanks to the presence of a hub in southern Europe, will improve its position with respect to its European competitors," the statement said.

Air France "foresees an important role" for Milan's two airports, with Linate, located in Milan, focused on business travelers while Malpensa would retain its three principal intercontinental connections to North America, South America and Asia, the statement said.

Rome's Leonardo da Vinci had 30.1 million passengers in 2006, while Malpensa had 21.8 million, according to the Airports Council International. Air France-KLM's other hubs, Paris' Charles De Gaulle and Amsterdam's Schipol, had 56.8 million and 46 million, respectively.

The government has been trying to off-load the loss-making Alitalia since last December.
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Old December 27th, 2007, 04:31 AM   #198
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Italy think-tank tells politicians to let Alitalia go

ROME, Dec 26 (Reuters) - An Italian think tank called on politicians on Wednesday to release their grip on flag carrier Alitalia and sell the airline to foreign bidder Air France-KLM.

Prime Minister Romano Prodi's cabinet will discuss on Friday what to do with the state's 49.9 percent stake in Alitalia , whose board has recommended the Air France bid and rejected one by a smaller Italian airline which is preferred by the biggest unions and many politicians.

Opponents to the foreign bid say the larger airline would swallow up Alitalia and turn it into a regional carrier. Politicians in the wealthy north say Air France's plan to centre operations in Rome, downgrading Milan, would be disastrous.

But the free-market Bruno Leoni Institute (IBL) said resistance to a foreign takeover was a symptom of Italy's reluctance to allow the market to decide if and how big companies survive.

"The fear of the political classes and the unions is all about losing decision-making power over Alitalia," said Andrea Giuricin of the IBL. "But it is precisely these two groups of people who are responsible for Alitalia's state of crisis."

Inefficiencies, incessant labour disputes and Alitalia's two hubs -- Rome and Milan -- are among the reasons blamed for its losing 1 million euros ($1.44 million) a day despite dominating the market in one of the world's most popular tourist destinations.

After years of state support -- now outlawed under European Union law -- Prodi vowed to completely privatise Alitalia, despite opposition from parts of his Catholics-to-communists coalition.

He now faces the tough decision of whether to sell to the Franco-Dutch airline or over-rule Alitalia's board and opt for a bid by private airline Air One, backed financially by Banca Intesa Sanpaolo and politically by the main unions, the head of employers' group Confindustria and northern politicians.

Air France-KLM promises to sink 6.5 billion euros in long-term investments into Italy's flag airline, preserve the Alitalia brand and an extensive network of routes in Italy. An Air One bid has the attraction of keeping Alitalia Italian.

A union representing air crews went against the current and came out on Wednesday in favour of the Air France bid. Avia said it would ballot its members of Jan. 3 and expected a resounding yes to the foreign takeover.

"Politicians should stop meddling with business decisions taken by a board which has knowledge and legitimacy," Avia President Antonio Di Vietri told ANSA news agency. "Defying those decisions would lead to bankruptcy within months."

Prodi has declined to be drawn on his preference and issued a statement denying an assertion by the Financial Times that he and his economy minister, Tommaso Padoa-Schioppa, favoured the Air France bid while most of his cabinet preferred the home-grown option.
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Old December 31st, 2007, 08:06 PM   #199
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For me it seems counterintuitive to demote Malpensa when Milan is the clear queen of the Italian economy and the most natural hub economically speaking. Wouldn't it be more lucrative to have a Milan-centered airline with all that business traffic?

Although, as we were discussing in the Spanish forum, it could be that AF-KLM simply want to push subsidiary Alitalia's hub further away from the "golden banana" of the EU as to not allow for competition with the main hubs of Paris and Schipol.

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Old December 31st, 2007, 08:36 PM   #200
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Quote:
Originally Posted by xote View Post
For me it seems counterintuitive to demote Malpensa when Milan is the clear queen of the Italian economy and the most natural hub economically speaking. Wouldn't it be more lucrative to have a Milan-centered airline with all that business traffic?
Facts have shown it isn't.
Currently Rome airport system has more passengers than Milan's, excluding transit passengers.

They surely produce lower yields but that's probably not a big issue. On the other hand, Rome is the third touristic destination in Europe and its economic importance is not that negligible. And while the economic strength of Milan is mainly due to small enterprises with little presence on global markets, all the bigs Italian firms (Finmeccanica, Eni, Enel) have their HQs in Rome, as well as main political, cultural and educational institutions of the country, the Vatican, etc.

Plus, Milan's airport system is split up into two distinct airports, and this is not good in an airline hub perspective, while Rome's is concentrated into just one (the second one being just a LCC airport). And let's not forget that Alitalia historical hub has been Rome for decades, and they still have there most of maintenance areas, employees, etc.

Last edited by Federicoft; December 31st, 2007 at 09:01 PM.
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