Pressure builds to review Alitalia sale
By Guy Dinmore in Rome and Adrian Michaels in Milan
Published: January 30 2008 20:23 | Last updated: January 30 2008 20:23
Italy’s next government will come under immediate pressure to review the planned sale of loss-making Alitalia to Air France-KLM and reopen negotiations with rival Air One, according to officials and industry sources.
Analysts said the collapse last week of Romano Prodi’s centre-left coalition and the ensuing political uncertainty could throw open the attempted sale of the state’s 49.9 per cent stake, while Alitalia’s bankruptcy clock is ticking.
People close to the situation say the Treasury’s right to sign off on such a deal in the current climate could be tested in the courts.
Procedures carried out by the finance ministry last year in selecting Air France-KLM for exclusive negotiations could also be challenged.
In the event of a new government “everything has to be rediscussed,” Alessandro Bianchi, the outgoing transport minister and a supporter of the failed Air One bid, told reporters yesterday. A few hours later President Giorgio Napolitano asked Franco Marini, senate speaker, to explore the possibility of forming an interim government with a controversial mandate to reform the electoral system.
No date for elections has been set so far.
Air One, owned by entrepreneur Carlo Toto, is expected to call for its offer to be reconsidered and to be readmitted into negotiations while discussions with Air France-KLM continue.
People close to Air One said the airline is also expected to announce new partners in its consortium, and to rejig its financial offer. Tommaso Padoa-Schioppa, the outgoing finance minister, announced in late December that after considering the rival offers the government had decided to enter into exclusive negotiations with Air France-KLM.
Air France-KLM, which is busily going through Alitalia’s books, has until mid-March to present a binding offer.
Officials yesterday denied reports that the two airlines were speeding up the process because of the political uncertainty. But they also warned that Alitalia, which loses more than €1m ($1.49m) a day, would risk bankruptcy if a new owner was not found. Just how much longer the ailing airline can struggle on is unclear. Some analysts give it a matter of months.
The fate of Alitalia could become an election issue in itself. In playing the Italian card and promising to reverse plans by Alitalia to slash flights at Milan’s Malpensa airport, Air One won the support of regional centre-right politicians as well as most of the trades unions and some ministers in Mr Prodi’s government.
Ministers in the outgoing centre-left government are extremely concerned about the damage to Italy’s reputation if the decision to give Air France-KLM exclusive negotiations were to be reversed within a matter of weeks. Analysts also question how patient Air France-KLM will be.
Copyright The Financial Times Limited 2008
By Guy Dinmore in Rome and Adrian Michaels in Milan
Published: January 30 2008 20:23 | Last updated: January 30 2008 20:23
Italy’s next government will come under immediate pressure to review the planned sale of loss-making Alitalia to Air France-KLM and reopen negotiations with rival Air One, according to officials and industry sources.
Analysts said the collapse last week of Romano Prodi’s centre-left coalition and the ensuing political uncertainty could throw open the attempted sale of the state’s 49.9 per cent stake, while Alitalia’s bankruptcy clock is ticking.
People close to the situation say the Treasury’s right to sign off on such a deal in the current climate could be tested in the courts.
Procedures carried out by the finance ministry last year in selecting Air France-KLM for exclusive negotiations could also be challenged.
In the event of a new government “everything has to be rediscussed,” Alessandro Bianchi, the outgoing transport minister and a supporter of the failed Air One bid, told reporters yesterday. A few hours later President Giorgio Napolitano asked Franco Marini, senate speaker, to explore the possibility of forming an interim government with a controversial mandate to reform the electoral system.
No date for elections has been set so far.
Air One, owned by entrepreneur Carlo Toto, is expected to call for its offer to be reconsidered and to be readmitted into negotiations while discussions with Air France-KLM continue.
People close to Air One said the airline is also expected to announce new partners in its consortium, and to rejig its financial offer. Tommaso Padoa-Schioppa, the outgoing finance minister, announced in late December that after considering the rival offers the government had decided to enter into exclusive negotiations with Air France-KLM.
Air France-KLM, which is busily going through Alitalia’s books, has until mid-March to present a binding offer.
Officials yesterday denied reports that the two airlines were speeding up the process because of the political uncertainty. But they also warned that Alitalia, which loses more than €1m ($1.49m) a day, would risk bankruptcy if a new owner was not found. Just how much longer the ailing airline can struggle on is unclear. Some analysts give it a matter of months.
The fate of Alitalia could become an election issue in itself. In playing the Italian card and promising to reverse plans by Alitalia to slash flights at Milan’s Malpensa airport, Air One won the support of regional centre-right politicians as well as most of the trades unions and some ministers in Mr Prodi’s government.
Ministers in the outgoing centre-left government are extremely concerned about the damage to Italy’s reputation if the decision to give Air France-KLM exclusive negotiations were to be reversed within a matter of weeks. Analysts also question how patient Air France-KLM will be.
Copyright The Financial Times Limited 2008