4 NOVEMBER 2013

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Article from BTNews 4 NOVEMBER 2013

Air France investment problems

Air France-KLM has written off the value of its stake in Alitalia, casting doubt over its willingness to invest further in the struggling carrier as a weak economy chips away at its own debt reduction plans. 

Another investment, Dublin-based Cityjet, recorded pre-tax losses of €208.9m last year, according to its latest set of financial accounts.  Finding a new owner for what is two airlines (CityJet and VLM) is clearly not without its difficulties.

The Franco-Dutch carrier has disclosed a €119m charge for its 25% in Alitalia, which is seeking a capital increase of €300m to stay afloat amid tough competition from low-cost rivals and high-speed rail.

Air France-KLM is officially backing Alitalia's financing move but has not said whether it will take part despite mounting pressure from Italian shareholders.  Having written off its original investment, and in a weak state itself, more investment is seen as unlikely in an airline that has not made a profit in over a decade.

February is seen as crucial time for Alitalia when it could run out of money and find itself with no future. www.alitalia.com

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