Alitalia reports $777 million loss for 2007
29 May 2008
Italy's troubled state-run airline, Alitalia SpA, has warned that it needs a recapitalization "as quickly as possible," after it reported a fifth straight annual loss. The carrier had a net loss of 494.7 million euros ($777 million) for 2007, mainly on the back of surging oil prices, it said last night.
``The company requires an adequate injection of new capital'' and ``awaits directions from the main shareholder,'' Alitalia said in last night's statement. ``The financial uncertainty is creating very negative effects and eroding credibility.''
Sales fell 4.3 per cent to 954 million euros on the back of a 10 per cent drop in traffic as the Rome-based airline slashed unprofitable routes.
The Italian government provided a bridge loan of $465 million (300 million euros) to the carrier last month, aimed at keeping it afloat till new prime minister, Silvio Berlusconi, found a buyer. New buyers are are being sought after Air France-KLM pulled out of takeover talks because of opposition from labor unions.
Berlusconi, who won a third term in office on 14 April, was also opposed to the AF-KLM offer saying he preferred an Italian ownership for the airline. He had also promised to take the lead in organising such an all-Italian consortium.
The company's situation has only worsened since then and the consortium is yet to materialise. Analysts now say that the carrier needs a serious business plan that can allow the company to keep operating.
Alitalia stock has slumped 39 per cent this year, giving a market value of 678 million euros.
