Alitalia’s stock suspended…

litalia’s problems are not gone… The Italian national airline is getting closer to bankruptcy. The Italian Government said it still intends to sell its shares (49.9% of the capital) to a private company, and the quotation is still suspended on Milan stock markets.

In order to ensure Alitalia’s survival, the Italian Government passed a decree that could allow a “faster” privatisation, while respecting the European regulations. A bank (Intesa Sanpaolo) has been nominated to advise Alitalia’s official in the privatisation process. The decree allows the privatisation without going through the legal auction process to sell the 49.9% shares the Italian State owns, and the Government will not have to make public critical information that could “endanger” the deal. However, companies interested in potentially taking over the airlins should have access to Alitalia’s financial data.

For Air France KLM, Alitalia’s deal is still dead!

When the Italian Government announced Alitalia was back on sale, Sylvio Berlusconi totally changed sides, saying that a potential alliance might be possible with the French-Dutch airline Air France-KLM. The Chief of Italian Government finally agreed that such a deal could be “a good solution” for Alitalia… complete opposite of its pre-elections opinions!

Since Air France, and its CEO Jean-Cyril Spinetta previously decided to stop negociating with Alitalia’s unions and the Italian Government, Berlusconi’s announcement was quite surprising. Anyhow, Air France Executive announced on June 9, 2008 that the take over was definitely off: Air France KLM CFO, Philippe Calavia, declared that the deal “could not go through [...] under the current conditions, and he [I] does not [don't] see what could possibly make them [us] change their [our] minds.” He also reproved the Italian political interference for this collapse in take over.

Alitalia and the Italian Government seem to have to find a new company to take over their “financially crippled carrier” since Air France KLM is not anymore in the race. Moreover, since the Italian Government granted Alitalia a €300 million subsidy to survive for a few more months, the airline will face an investigation of the European Union’s financial services since other airlines (British Airways particularly) showed their disagreement in this public subsidy plan!

What are the odds that Alitalia survives and what is behind this take over plan? Is Air France KLM Group waiting for the Italian Government to sell off its national airline for a token euro? We will probably know more after the EU investigates the case and the privatisation process is started, and the first proposals received…

References

  • Article: Alitalia: le gouvernement Berlusconi relance le processus de vente, La Tribune, May 30, 2008: here
  • Article: Revirement de Berlusconi qui évoque la possibilité d’une alliance d’Alitalia avec Air France-KLM, La Tribune, Jun. 3, 2008: here
  • Article: L’action Alitalia suspendue, La Tribune, Jun. 4, 2008: here
  • Article: Alitalia : le PDG d’Air France-KLM quitte la table des négociations, Le Monde (subscription needed), Apr. 21, 2008: here
  • Article: Alitalia : l’Etat italien accorde une aide d’urgence, Le Figaro, Apr. 23, 2008: here
  • Article: Crise politique en Italie : Air France-KLM travaille toujours sur Alitalia, Les Echos, Jan. 30, 2008 (paper edition)
  • Article: Pour Air France, la reprise d’Alitalia n’est pas risquée, Le Monde, Jan. 8, 2008 (paper edition)
  • Website: Air France Corporate site: here
  • Website: KLM Royal Dutch Corporate site: here
  • Website: Alitalia Corporate site: here

References from the Transport Information Group