Air France-KLM may help Alitalia under conditions: report

Tue Oct 1, 2013 3:53pm EDT
 
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By Agnieszka Flak and Lionel Laurent

MILAN/PARIS (Reuters) - Franco-Dutch carrier Air France-KLM (AIRF.PA: Quote) said on Tuesday it was open to merging with Alitalia in a move seen as the best solution for turning round the loss-making Italian airline.

But both sides said any tie-up would depend on certain conditions being met first, as time runs out for indebted Alitalia.

Italy's government and Alitalia shareholders have been betting on Air France-KLM raising its stake from 25 percent and possibly even taking control of the company.

But there are disagreements over financial commitments and a possible business strategy for the Italian group should a merger go ahead, sources familiar with the matter said.

"Our conditions for helping Alitalia are very strict. If the conditions are met, I am ready to go ahead," Air France-KLM Chief Executive Alexandre de Juniac told French daily Les Echos on Tuesday, without giving more details on the terms he had in mind.

Gilberto Benetton, who invests in Alitalia via motorway group Atlantia's 8.9 percent stake in the airline, said earlier on Tuesday he would welcome Air France-KLM taking control of the group, but warned Italy's interests should be protected first.

Italian Prime Minister Enrico Letta, other ministers, banks and Alitalia's management met on Tuesday to find a way of beefing up Alitalia's finances to give it greater negotiating clout in its dealings with Air France-KLM.

But the talks failed to reach any decision because of the uncertain political climate and another meeting was called for next week.   Continued...

 
An Alitalia plane passes an Air France plane on the tarmac of Charles de Gaulles International Airport in Roissy near Paris, January 8, 2013. REUTERS/Charles Platiau