Alitalia
Alitalia stays on life support
2008 brought many surprises to investors, from the collapse of Lehman Brothers Holdings to the bailouts in the ailing car industry. The latest jaw-dropper is that Alitalia, the loss-making, government-funded, battered airline, made it into 2009.
As the year came to an end, Compagnia Aerea Italiana, a group of private-sector investors that owns the carrier, was in talks to sell a 25.0% stake for 300.0 million euros to rival Air France. Alitalia has been in talks with Air France and Lufthansa, as it expects to throw an international player into the mix.
Last October, just hours after the CAI had pulled out of a deal to strip the airline of unprofitable assets and debts, the bidder presented a binding offer to the airline's unions, which was accepted by the majority of employees.
On Wednesday, the airline also completed the takeover of its smaller competitor Air One as part of a plan to relaunch Italy's bankrupt national carrier. Air One said it had closed the deal with the group of Italian investors that has acquired the bulk of Alitalia's profitable assets to create a single, streamlined carrier.
The investors, which include Air One chief Carlo Toto, are scheduled to officially take over operations at Alitalia on Jan. 13. Air One said Toto would reinvest 60 million euros ($84.5 million) in the new Alitalia. It did not disclose the amount paid in the deal.
Alitalia's shares have been suspended from trading since June 3, last trading at 45 euro cents (56 cents), 98.0% above its 52-week low of 19 euro cents (24 cents) on March 19.
But CAI's involvement might not necessarily guarantee Alitalia survival beyond March 1, when its license expires. Mounting pressure from the unions who oppose the deal or increasing multimillion-dollar losses might hinder the investors' efforts to resurrect the carrier. Alitalia has been nothing but a string of troubles to the Italian government, which owns a 49.9% stake in it. It loses about 2.0 million euros ($2.8 million) a day and has faced mounting union pressure against layoffs and streamlining measures meant to keep it flying.
Alitalia last reported a profit in 2002 after KLM paid 200.0 million euros ($283.0 million) to break an alliance with the company. Its former chairman Maurizio Prato called Alitalia "cursed," although Pope Benedict XVI said recently that he had been praying for the airline.
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