Massive losses for Alitalia as hope fades

Alitalia, Italy’s national airline, posted a major increase in losses during the first quarter of the year, as hope that the all but insolvent carrier may be able to recover appears to fade. While Alitalia generated a loss of around one million euros per day, this deficit has now reportedly grown to two million euros. Airline executives note that the problem is that fewer passengers are booking tickets with Alitalia, due to concerns about its future, and high oil prices are also eating away at the carrier’s funds.

Overall, the carrier generated a pre-tax loss of around €215 million during this period, which amounts to a 40 percent increase compared to losses at the beginning of 2007. The airline also revealed that with only €96 million remaining in its accounts at the end of March, Alitalia had all but run out of liquid cash, until the Italian government gave it a controversial emergency loan of €300 million.

There is still no clear sign of a serious bidder who would be interested in purchasing Alitalia, which the government has tried unsuccessfully to privatize for nearly a year. Silvio Berlusconi, the country’s new prime minister, ran on a campaign in which he pledged to sell the carrier to Italian interests, rather than Air France-KLM, as had been previously planned, but there are few signs of any interested domestic investors. In fact, the only businessman who appeared to have expressed an interest in Alitalia was Bruno Ermolli, one of Berlusconi’s personal friends, but Alitalia’s executives refused to furnish him with information on the carrier’s accounts until he expressed firm resolve in terms of potentially buying the airline.

www.alitalia.com