Italian airline update

Alitalia is still with us following crisis meetings on Friday when its board members, including Air France-KLM, approved a capital increase as part of a government-led €500m bailout. (See BTN 30 September)

Earlier in the week the airline’s future looked in grave doubt with major creditor Eni threatening to cut fuel supplies unless the airline could show it had solid financial underpinning.

But with Alitalia, which last turned a profit in 2002, spending about €10m a day according to estimates, the new cash injection will not last long.  It is regarded as a stop-gap solution before talks start with Air France, itself not on all too safe grounds, on a possible amalgamation.

If Air France-KLM, which has a 25% stake in the airline, and in the middle of its own restructuring, underwrites its full quota of the capital increase, it will provide another €75m. www.alitalia.com

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