Three airlines contend to purchase Alitalia

According to Italian Prime Minister Romano Prodi, there are currently three companies or corporate groups seriously interested in purchasing the country’s beleaguered airline, Alitalia. Prodi also confirmed what most analysts have been speculating all along—namely, that Air France-KLM, continental Europe’s largest airline, is among the bidders. The prime minister made the announcement in Nice, at a special Franco-Italian summit. No decision has been taken, however, on which of the three bidders will be invited to enter into further negotiations, as Prodi is currently waiting to hear back from a panel of experts who will examine all bids and determine which of these is the most beneficial for Italy. The government expects to know more early next week.

In addition to Air France-KLM, Lufthansa and a smaller, local carrier, Air One, are all interested in Alitalia and their submitted bids are presently being considered. After a failed round of privatization in June 2007, the Italian government is very much keen on selling its controlling share in the struggling airline as soon as possible. The carrier’s losses are said to be growing by the day and it is also weighed down by a large debt. Additionally, frequent strikes and labour disputes have led to service disruptions, which have causes headaches for passengers and also damaged the company’s credibility in the eyes of some travelers and investors.

Whoever does end up buying the airline will have to maintain the carrier’s national character, as per the terms stipulated in the privatization tender. Produ has suggested that the airline may be sold by December 25^th.

www.alitalia.com