Company Watch - Alitalia

Aeroflot is not considering buying Italian airline Alitalia at the moment and is inclined to drop the idea entirely, Deputy General Director Lev Koshlyakov said on Sept. 25. Aeroflot has said it wanted to see new, more attractive terms before deciding whether to bid for the Italian company. Sep 25, 2007

Air France KLM refused to take part in an auction this year for the Italian state's near 50 percent stake in Alitalia which found no buyers. Air France KLM has since said it would listen to any fresh proposal from Alitalia. CEO Spinetta told La Tribune on Sept. 24 he expected Prato to look for "an industrial or financial partner, or both" but no contact had taken place yet. He did not rule out Air France KLM taking stakes in airlines outside Europe. Sep 25, 2007

Air France KLM's head was quoted on Sept. 24 as saying he expected talks on a possible alliance with Alitalia to start next month. In an interview with La Tribune newspaper, Jean-Cyril Spinetta said also a new phase of synergies would start soon in Air France's own merger with KLM and that the airline had to be ready to take stakes in rival operators outside Europe. He affirmed Air France KLM would not do a deal with Alitalia or Spain's Iberia, which it is also eyeing, unless it was "strongly creative" of value. Sep 25, 2007

Air France KLM will only consider making a bid for Spain's Iberia or Italy's Alitalia if the deal meets its target of an 8.5 percent return on capital after tax by 2009-2010, an airline executive said on Friday. Speaking at the autumn conference of brokerage Cheuvreux, Chief Financial Officer Philippe Calavia repeated that European consolidation was necessary. Air France added that the level of forward bookings for the next three months remained good and confirmed its current year outlook. Calavia said in a statement that unit revenues for the second quarter "should show a further rise year-on-year, while the improvement in the cargo division is continuing." Sep 28, 2007

Alitalia is in a "comatose" state and cannot repay over EUR1 billion euros (USD$1.4 billion) in debt due in the next three years, its chairman said, raising new doubts on whether the airline can survive without a buyer. The Italian airline is expected to post losses of just under EUR400 million (USD$563.1 million) excluding special items this year, and needs a strong alliance to turn its fortunes around, Maurizio Prato told a Senate hearing. Alitalia has begun a fresh hunt for a suitor to resuscitate it after an auction for the Italian state's controlling stake in the airline collapsed in July. He also attacked Alitalia's unions for their attitude to its worsening condition. He said the company did not have enough money to repay EUR320 million (USD$450.5 million) of loans in the next two years or EUR714 million worth of bonds due in 2010. Sep 26, 2007 Comatose' Alitalia Can't Repay Debt - Chairman Alitalia is in a "comatose" state and cannot repay over EUR1 billion euros (USD$1.4 billion) in debt due in the next three years, its chairman said, raising new doubts on whether the airline can survive without a buyer. Sep 26, 2007

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