Italy is working on a temporary financial agreement with banks to keep struggling airline Alitalia afloat and put it in a stronger position to seek partners, a government minister has said.
According to newspaper Il Sole 24 Ore, industry minister Flavio Zanonato said said the company had to be protected financially while it restructures.
Since being taken private by a consortium of Italian investors in early 2009, Alitalia has accumulated net losses of more than €840 million, debt of about €1 billion and is fast running out of cash.
Alitalia's board is meeting later today when recently appointed CEO Gabriele Del Torchio is expected to seek approval for a €200 million capital increase plus the same sum in fresh borrowing to keep the company from collapsing, sources close to the matter have said.
“Today the company has to be protected financially so that it can execute its restructuring plan and be able to strike alliances with others from a position of strength,” Mr Zanonato told the paper in an interview.
Italy was betting on top shareholder Air France-KLM making a cash investment and increasing the 25 per cent stake it bought in 2009, possibly even taking control of the company, but any such commitment may clash with Italy's ambition to make Rome a transport hub for intercontinental flights.
Air France-KLM already operates two hubs out of Paris and Amsterdam and would be unlikely to want to develop a third one in Europe, analysts have said.
“It’s not a given that only the French could put in capital,” Mr Zanonato said.
“We definitely must avoid that Alitalia is taken by buyers who have different strategic interests from those of our country,” he said, adding that he did not want the carrier to become merely an appendix of another and be significantly downsized as a result. (Reuters)