Poses Serious Challenge To Rival Bidder Air One
Is there a ray of hope for Italy's struggling national carrier?
On Thursday, Air France-KLM announced it will make an offer for
The Wall Street Journal reports the only serious challenge to an
offer from the world's largest airline, based on revenue, would
come from Italian carrier Air One SpA. The tiny airline planned to
make an offer ahead of Thursday's deadline.
As ANN reported, Air
France-KLM was rumored to be the strongest contender for Alitalia,
even after a seven-month effort by the Italian government to
auction off the airline came to an unsuccessful end in July.
A third bidder in that auction, Deutsche Lufthansa, walked away
from efforts to sell off the airline... saying taking on the
struggles at Alitalia would have negatively affected its debt
Indeed, it's something of a puzzlement why anyone would want
Alitalia. The carrier loses about $1.5 million per day, according
to the WSJ, and is well known for labor woes among its unions. A
recent strike by transportation workers throughout Italy did little
to make the airline more attractive to potential suitors.
Diogenis Papiomytis, aviation consultant with Frost &
Sullivan, says Air France-KLM is the likely choice, due to past
experience with such situations.
"Air France-KLM are the most suited investor to take over
Alitalia, more so than Lufthansa because they've gone through the
process of merging two totally different airlines," said
Papiomytis. "And they are the ones who will benefit the most from
A takeover by Air One may be more suitable to some within
Italy's fragile government, as Alitalia would remain in Italian
hands... but there's considerable doubt the small airline has what
it would take, financially and otherwise, to turn Alitalia
In contrast, Air France-KLM offers considerable resources... but
it may ultimately follow Lufthansa's reasoning, that taking on the
Italian airline would hurt its profitability.
Market value for Alitalia is said to be €1.1 billion; the
airline also has about €1.2 billion of debt.