Alitalia to Seek Asian Partner If Air France-KLM Backs Out

Tuesday, 12 Nov 2013 08:58 AM

 

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Italy is hoping for a southeast Asian partner for Alitalia should its top shareholder Air France-KLM decide not to participate in a 300 million euro ($402 million) capital increase, Transport Minister Maurizio Lupi said.

The troubled Italian carrier needs a significant cash injection from its shareholders to continue flying. But Air France-KLM, Alitalia's biggest investor with a stake of 25 percent, has so far refrained from committing to the cash call, with French media saying it won't subscribe.

The French carrier and other Alitalia investors have until the end of Thursday to decide whether they want to take part in the capital increase.

"I hope Air France will subscribe ... if they don't, their stake will fall to around 7 percent and then we can look for a partner in southeast Asia," Lupi told journalists.

Asked if there was also talk about Gulf carrier Etihad Airways, which has been mentioned by Italian media as a possible partner for Alitalia, Lupi said: "I don't think so, I've read about (Russia's) Aeroflot and Air China."

Though Alitalia was privatized in 2008, the Italian government has been active in trying to rescue the national carrier, which it considers a strategic asset.

Last month, Rome backed a plan to guarantee the near-term survival of Alitalia that included a cash injection of up to 75 million euros by state-owned postal services group Poste Italiane.

In exchange for its support, the government has demanded a radical new business plan, something Alitalia is due to discuss at a board meeting on Wednesday along with heavy job losses.

Air France has also demanded strict conditions in Alitalia's business plan as a condition to join the cash call.

The French airline wrote off at the end of October the entire value of its stake in Alitalia, a decision that leaves Air France free to continue to invest in the rival, or walk away without any future impact on its accounts.

© 2014 Thomson/Reuters. All rights reserved.

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