Aeroflot finally pulls out of race for Alitalia

Moscow: Some two days after dropping hints that it may pull out of the race to acquire a controlling stake in Italy's ailing state-controlled Alitalia Airlines, Russia's flagship air carrier, Aeroflot, has made its withdrawal formally known through a news release on Wednesday.

"After considering all the circumstances linked to Alitalia's privatization, Aeroflot has decided to quit all bidding procedures and withdraw its bid for shares in this company," the news release said.

Aeroflot said its consultants "had not been given access to full information about the commercial and operational status of Alitalia, which could have helped formulate a well-grounded business proposal to restructure the airline" as part of the bid.

Aeroflot also pointed out that the other reason for its pull out were the terms underlining Alitalia's privatization, which would seriously restrict Aeroflot's options for improving the Italian air carrier.

Aeroflot's retreat follows on the heels of another European major, Lufthansa, which too voiced similar reasons as that of Aeroflot for withdrawing from the race. (See: Lufthansa steps out of the race for Alitalia) Established in 1947, and one of Europe's old guard flag carriers, Alitalia has been fighting a losing battle against low cost competition and rising fuel prices, turning it into one of Europe's worst performing airlines. It posted a 3.2-billion-euro loss in 1996-2006, including 380 million euros in 2006.

Last year the Italian government finally decided to privatize the airline.