Alitalia board chooses Air France KLM
Monday December 24, 2007
Air France KLM's nonbinding bid for Alitalia received unanimous approval from the Italian airline's board Friday, setting up an intriguing debate next month when the government will have to decide whether to turn over ownership and management of its flag carrier to a foreign company.
The Italian government has indicated that it will have the final say on who buys its 49.9% stake (ATWOnline, Dec. 21), but the five-member AZ board made it clear Friday that it will be a strong advocate for the Franco-Dutch bid rather than that submitted by Italian carrier Air One. The board said that "given [AZ's] current critical financial condition," the AF KLM offer is "the appropriate solution to preserving the company's assets and to promote its quick and permanent restructuring, thanks to the benefit of synergies arising from the integration in a major international group of the airline industry." AF KLM and Alitalia both are members of SkyTeam.
AF KLM Chairman and CEO Jean-Cyril Spinetta said the company's hope is that Alitalia "shares the benefits of the profitable growth strategy successfully implemented by Air France KLM," and he reiterated that "it has never been our intention to make Alitalia a regional [or feeder] airline, but on the contrary to strengthen its role as the Italian national flag carrier and to win back its natural market share." Both AF KLM and AZ said maintaining the Alitalia brand is an important component of their plans.
Alitalia said the AF KLM plan calls for €6.5 billion ($9.33 billion) in long-term investment (including a €750 million capital increase), a level of job cuts consistent with its own turnaround plan, long- and short/medium-haul fleet renewal, "major upgrades" in cabins and inflight services, emphasis of Rome Fiumicino as AZ's principal hub and "the preservation of an adequate coverage of the Italian market and an appropriate level of service offered at national, international and intercontinental levels alike."
by Brian Straus
Monday December 24, 2007
Air France KLM's nonbinding bid for Alitalia received unanimous approval from the Italian airline's board Friday, setting up an intriguing debate next month when the government will have to decide whether to turn over ownership and management of its flag carrier to a foreign company.
The Italian government has indicated that it will have the final say on who buys its 49.9% stake (ATWOnline, Dec. 21), but the five-member AZ board made it clear Friday that it will be a strong advocate for the Franco-Dutch bid rather than that submitted by Italian carrier Air One. The board said that "given [AZ's] current critical financial condition," the AF KLM offer is "the appropriate solution to preserving the company's assets and to promote its quick and permanent restructuring, thanks to the benefit of synergies arising from the integration in a major international group of the airline industry." AF KLM and Alitalia both are members of SkyTeam.
AF KLM Chairman and CEO Jean-Cyril Spinetta said the company's hope is that Alitalia "shares the benefits of the profitable growth strategy successfully implemented by Air France KLM," and he reiterated that "it has never been our intention to make Alitalia a regional [or feeder] airline, but on the contrary to strengthen its role as the Italian national flag carrier and to win back its natural market share." Both AF KLM and AZ said maintaining the Alitalia brand is an important component of their plans.
Alitalia said the AF KLM plan calls for €6.5 billion ($9.33 billion) in long-term investment (including a €750 million capital increase), a level of job cuts consistent with its own turnaround plan, long- and short/medium-haul fleet renewal, "major upgrades" in cabins and inflight services, emphasis of Rome Fiumicino as AZ's principal hub and "the preservation of an adequate coverage of the Italian market and an appropriate level of service offered at national, international and intercontinental levels alike."
by Brian Straus
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