Air France to drop Alitalia bid if Berlusconi wins election

According to a report in the Telegraph, Air France-KLM may drop its bid to purchase Alitalia, Italy’s close to bankrupt national airline, if former Prime Minister Silvio Berlusconi wins today’s election. Berlusconi has been adamant in his opposition to the state-controlled carrier’s sale to the Franco-Dutch airline. The Telegraph cited anonymous insiders, who argued that Air France would not be willing to re-start stalled negotiations with a potentially hostile new government.

Alitalia is now closer than ever to bankruptcy. The airline only has €170 million left in its coffers, but it is using up an estimated €3.5 million a day. As such, industry experts suggest that the carrier may run out of money within a month. Even more troubling for the airline may be the fact that Italy’s aviation authority-Enac-has indicated that it may suspend Alitalia’s license within 14 days if the airline is not able to clarify how it plans to secure and stabilize its dismal financial situation. Vito Riggio, Enac’s president, apparently referred to the situation around Alitalia as “dramatic” and although he told journalists that the airline would be able to continue operations using a temporary license, in the majority of cases this step usually leads to bankruptcy. Riggio also observed that Alitalia is beginning to experience a decline in ticket sales, mainly due to the uncertainty around the carrier’s future. There is now a risk that this process will speed up in the coming days, especially if it becomes clear that Air France will drop its bid to purchase the carrier. Enac’s president expressed his hope that Air France-KLM could still be brought back to the negotiating table, noting that it did not seem likely that a consortium of Italian businesspeople and investors would be willing or able to take over the state’s 49.9 percent controlling stake in the deeply troubled airline.

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