Air France ready to inject €3 billion into Alitalia

Air France has indicated that it is prepared to inject just over €3 billion into Italy’s struggling flag carrier, Alitalia, provided that the Italian government agrees to sell the majority of shares to the French airline. Leo van Wijk, Air France-KLM’s vice-president, noted during an interview with the Wall Street Journal that his company is now interested in gaining full control over the Italian airline. Van Wijk observed if Italian officials accept Air France’s impending bid for the country’s national airline as part of the privatization process, the Franco-Dutch carrier would request that it be given full control over Alitalia, in part because this way it would be easier for the new owners to implement the changes needed to make the company profitable. The vice-president argued that the only way to make Alitalia successful again is to inject a significant amount of new capital—in the range of $4.4 billion, according to some estimates—and the carrier must be re-fleeted as well.

Van Wijk also confirmed that Air France is looking at investing in the US commercial airline market as well, specifically if a proposed merger between Delta Air Lines and Northwest goes through according to current plans. Air France is likely to purchase a minority share in the newly fused carrier.

Air France and KLM merged in 2004 and since then, the Franco-Dutch company has become continental Europe’s largest airline. The acquisition of Alitalia would give it an ever greater edge over its main competitors, namely Lufthansa and British Airways, both of which are members of rival airline alliances.

www.airfrance.com