Air France-KLM offers share swap as part of Alitalia bid
ROME (TVLW) - Air France-KLM has offered a share swap and a capital increase of €750 million (US$1 billion) as part of its bid for Alitalia, the chairman of the Franco-Dutch airline was quoted as saying. The group would renew Alitalia's aging fleet and cut up to 1,700 jobs, Jean-Cyril Spinetta was quoted as saying in Italian newspapers Sunday.
ROME (TVLW) – Air France-KLM has offered a share swap and a capital increase of €750 million (US$1 billion) as part of its bid for Alitalia, the chairman of the Franco-Dutch airline was quoted as saying.
The group would renew Alitalia’s aging fleet and cut up to 1,700 jobs, Jean-Cyril Spinetta was quoted as saying in Italian newspapers Sunday.
Alitalia is scheduled to hold a board of directors meeting Tuesday to announce a decision on which sole bidder to open negotiations with. The Italian government, which has a 49.9 percent stake in the struggling airline, met earlier this week but failed to decide on a preferred bidder.
The top contenders are Air France-KLM, the world’s largest airline by revenue, and Air One, the second largest Italian carrier by number of passengers.
“We have proposed a share swap, meaning that Alitalia will fully be part of the holding with Air France and KLM,” Spinetta was quoted as saying in Corriere della Sera.
Spinetta, speaking to Italian reporters in his Paris offices, said the deal would allow Alitalia to maintain its identity.
“Our ambition is to relaunch it, consolidate the market, make profit, renew its fleet, conquer new markets,” Spinetta reportedly said. “Saying that we want to turn Alitalia into a minor or regional company is false.”
Spinetta said Air France-KLM envisages an initial capital hike of €750 million (US$1 billion), and said the level of future investment could not be assessed as he did not know Alitalia’s financial situation in detail, according to Corriere. Alitalia’s fleet would be revamped with two or three new planes each year.
He said layoffs would be similar to those already envisaged by Alitalia’s own restructuring plan — between 1,000 and 1,700 job cuts, financial daily Il Sole 24 Ore and other newspapers reported. The issue is sensitive, as Italian unions have already threatened to strike during the Christmas holiday period if the government does not involve them in discussing the airline’s future.
Spinetta also confirmed plans to focus on Rome’s Leonardo da Vinci airport rather than Milan’s Malpensa hub, which he said “is the main cause of Alitalia’s losses.”
Alitalia has been hurt by high operating and fuel costs, competition from budget airlines and persistent labor unrest. The government has struggled to sell its share and earlier this year it had to scrap a tender after all potential buyers pulled out.
Premier Romano Prodi has insisted that nationality would not be a decisive factor in the government’s decision, and he is expected to discuss the issue when he meets Thursday with French President Nicolas Sarkozy.