Alitalia in death throes
23-Apr-2008 |
Airline Code [AZA]
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The chances of Alitalia surviving much beyond next month must be slimming. Air France-KLM has categorically walked away, leaving the Italian caretaker government with no other option than to provide the airline with emergency funding to keep it alive long enough for the incoming government to attempt to find some solution.
In doing so, Italy is running the gauntlet of possible EU action over illegal state aid. The European Commission will be taking a close look at the emergency loan – some EUR300 million – requested by Mr Berlusconi.
But as fuel prices climb relentlessly higher and the credit crisis bites deeper into fresh deal-making activity in Europe, it is likely Air France-KLM was the final throw of the dice for Alitalia. Aeroflot has been ordered to look at Alitalia once again by Russian President, Vladimir Putin, on a request from Mr Berlusconi, although better opportunities, such as the privatisation of CSZ Czech Airlines, are in the offing. Meanwhile, Alitalia’s militant unions will meet with management later in the week to discuss the increasingly dim outlook.
Italian industry regular, ENAC, is also meeting with Alitalia to inspect its finances next Monday. If it is not satisfied with what it sees, particularly any implications for the maintenance of safety standards, Alitalia’s operating license could be suspended. This could possibly be the best outcome for Mr Berlusconi and his incoming government. The failure of a national company in the early weeks of Mr Berlusconi's third term of office would not set the right tone.
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Alitalia in death throes 
