ROME (TVLW) – The chief executive of Intesa Sanpaolo SpA (ISP.MI), the main bank backing Air One SpA’s bid to buy Alitalia SpA (AZA.MI), Monday said that selling Italy’s state-controlled airline to Air France-KLM (AKH) was like throwing it away.
“Let’s hope that we’re not going to give up on building a nice Italian company and that, after years of mismanagement, we’re going to throw it away,” Corrado Passera said, when asked about remarks by Alitalia’s chairman showing he favors an Air France-KLM bid.
Alitalia Chairman Maurizio Prato said in an interview published Saturday in daily Corriere della Sera that an Air France-KLM plan to buy Italy’s largest airline was based on his own turnaround project, while that of rival bidder Air One wasn’t fully clear.
Passera said the Air One plan would turn Alitalia into a big European carrier, while choosing the Air France-KLM bid would amount to making Alitalia “a unit of a well-known competitor. It’s like giving up.”
Air France-KLM, the world’s largest airline by sales, and Air One, Italy’s much smaller domestic carrier, last week presented non-binding offers for Alitalia.
Air One said it plans EUR4.0 billion in investments to relaunch Alitalia, and it has the backing of three other banks apart from Intesa Sanpaolo: Morgan Stanley (MS), Nomura Holdings (NMR) and Goldman Sachs Group Inc. (GS).
The Air France plan is expected to have Rome’s Fiumicino airport as the main Italian hub, a move favored by Alitalia Chairman Prato, while Air One plans to also keep Milan’s Malpensa as a hub.
By the end of this week, Alitalia is expected to choose between Air France or Air One to continue exclusive talks with to sell the government’s 49.9% stake in the loss-making airline.
Beset by high operating and fuel costs, stiff competition from budget airlines and persistent labor strikes, Alitalia is set to post another loss this year. In 2006, its net loss widened to EUR626 million from EUR168 million a year earlier, after it booked a hefty write-down to cover the depreciation in value of its aging fleet.