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Alitalia under new ownership

wire services  Jan 12, 2009

The new owners of Italian airline, Alitalia, are hoping for a more streamlined approach to travel.

The private owners, an all-Italian consortium led by the chairman of the scooter manufacturer Piaggio, are still looking for a foreign partner to help the airline turn a profit.

It is believed an Air France-KLM board meeting debated an Alitalia merger offer on Friday.

Alitalia's board is expected to announce a decision on a part purchase of Alitalia on Monday.

While the new privately owned airline officially takes off on Tuesday, some analysts have remained sceptical about whether the restructured Alitalia has a future.

Over the years the airline has been bound down with complaints about punctuality, poor in-flight services, lost baggage and unfriendliness to passengers.

he airline's name is unchanged. The flight attendants will not be sporting new uniforms. It is not even getting a new logo.

But Alitalia's new, private owners - an all-Italian consortium led by the chairman of the scooter manufacturer Piaggio - hope that a streamlined airline, tied to a bigger and stronger foreign partner, will be able to win back passengers and finally turn a profit.

The new Alitalia officially takes off Tuesday into Europe's crowded skies, during an aviation crisis that has led other airlines to reduce capacity and routes, or go out of business.

Many analysts remain skeptical about whether the restructured Alitalia has a future, at least as an independent airline.

"Giving the entity another lease of life - is it sustainable? No, of course not," said Nick Cunningham, an aviation analyst at Evolution Securities in London. "But if you rescue it and merge it with a larger carrier, you can get some sort of value out of the situation."

Other experts agree that Alitalia's reincarnation may simply be a way to gain traction before it is merged with one of the bigger European aviation groups, most likely Air France-KLM, which has proposed acquiring a 25 percent stake, reportedly for around €320 million.

The Air France-KLM board approved an offer Friday, according to a person close to the company, who declined to comment on the price. The person spoke on condition of anonymity because of the sensitivity of the situation. The offer is being considered by Alitalia's board, which was to announce a decision Monday.

Alitalia  under new ownership

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