Top > Business > 2006 > December > 2006-12-12

Alitalia Tender on Its Way

The Italian government, which owns 49.9% of the national airline Alitalia, intendeds to sell at least 30.1% of the company, while companies who`d like to purchase Alitalia, must bid for the whole company. The Italian Ministry of Finance say the tender will be published towards the end of the month. Potential buyers will have to guarantee services throughout Italy, keep the company`s national identity, symbols and brand. The Ministry of Finance also requires the buyer produce a business plan designed to save the failing airline.

Last week the trading in Alitalia stock was stopped pending a statement regarding the future of Alitalia by the Ministry of Finance. Before the trading stopped the company`s stock dropped by 0.7% leaving the stock price at 0.95 Euros a share. Alitalia has been experiencing financial problems, and is continually losing more and more money, due to high oil prices, competition from discount airlines and a series of strikes.

The prospects of a strategic alliance with Air France and KLM began with initial talks at the end of November, and representatives of Alitalia have stated that cooperation between the companies is possible. Air France has been less enthusiastic saying that if such an alliance were to take place Alitalia would have to go through a restructuring process, including the selling of the company to private investors. Alitalia`s CEO, Giancarlo Cimoli, told a parliamentary committee that only working with a group of international airlines would save Alitalia from bankruptcy.