Alitalia board opts for Air France-KLM as preferred buyer
22 December 2007
Rome: The board of Alitalia has opted for Franco-Dutch airline, Air France-KLM, as its preferred buyer on Friday, saying that it was a better fit as compared to a small Italian airline, Air One, favoured by some politicians and labour unions.
The board's decision, however, still has to pass muster with the government, which holds a 49.9 per cent stake in the badly haemorrhaging Italian flagship airline.
Announcing its decision, the board also urged the government to decide by mid-January on a bidder for exclusive talks, as planned, "in light of the company's critical financial situation."
Alitalia is mounting losses at a rate of 1.0 million euros a day and is already weighed down by 1.2 billion euros of debt.
As part of their bid, Air France-KLM have already issued assurances that they would not downgrade the country's largest airline into a regional carrier. They have also outlined long-term investment plans, worth $9.34 billion, which amongst other things would also be used to upgrade the airline's ageing fleet.
Air France-KLM chairman and chief executive, Jean-Cyril Spinetta, said that Air France-KLM was "delighted to have had our plan accepted as the best for the future of Alitalia."
Meanwhile, Air One, still hasn't given up hope as evident from the statement issued by them which said that they still hoped to clinch a deal, even without the support of Alitalia's board. The statement asserted that they would take their offer for Alitalia to the airline's biggest shareholder, the Italian state.
A disparate coalition of politicians, ranging from Catholics to communists, has in the past acted to prevent major Italian companies from foreign takeovers.