Alitalia board picks Air France-KLM’s bid

History

The Board of Directors of Alitalia has decided to choose Air France-KLM as its preferred bidder and considered its offer the best guarantee for the national carrier’s future, Italian media reported Saturday.

The decision came after a board meeting, which lasted almost seven hours and saw Air France-KLM win out over a rival offer presented by the AP Holding, the parent company of Italy’s biggest private carrier Air One. The board’s decision is, in fact, only a suggestion to the government which has the final word on the sale of the Treasury Ministry’s controlling 49.9% stake in Alitalia. The Italian government said earlier this week that it would make a decision on the board’s recommendation by the middle of January.

The French-Dutch carrier said it is a top priority to renew Alitalia’s fleet and that the combination of the three European brands „will be able to offer clients an unparalleled international network.” Air France-KLM’s plan calls for returning Alitalia to profitability by 2010, and includes total investments of €6.5 billion ($9.3 billion) through 2015. However, many analysts believed the AP Holding will now launch a political offensive to persuade the government to go against the Alitalia board’s recommendation.

The AP Holding confirmed this week it will be offering 1 euro cent per Alitalia share, compared to a reported 35 cents by Air France-KLM, and that it expected Alitalia to break even by 2009 and to return to profit by 2010. The AP Holding would invest a total of €5 billion in Alitalia, 1 billion to boost the company’s capital and 4 to renew its fleet. The Italian government owns a 49.9% share and has decided to sell most stake at the end of last year. An auction failed this summer after bidders complained they were denied access to Alitalia books and not guaranteed full control of the airline. (people.com.cn)

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