Manila Bulletin

Dark days for Italy’s Alitalia as rescue options narrow

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MILAN (AFP) – The future of Italy's Alitalia looked bleak Wednesday after state railway Ferrovie dello Stato and Germany's Lufthansa pulled out of a rescue attempt for the beleagured carrier.

''We are on a narrow and difficult road,'' Economic Developmen­t Minister Stefano Patuanelli told parliament, saying the options to save it were ''not endless.''

The government has been looking for buyers for the heavily-indebted company for years, without sucess.

Italy's Ferrovie dello Stato (FS) had been attempting to form a consortium to save Alitalia, but said Wednesday it had thrown in the towel after failing to find investors willing to meet the conditions.

Those included having a leading airline play a part in the rescue.

Talks had been underway with American airline Delta, Lufthansa, and Italy's Atlantia, a major operator of motorways and airports controlled by the Benetton family.

But Lufthansa insisted Tuesday that it was not interested in investing in Alitalia without a major restructur­ing of the company.

FS head Gianfranco Battisti said the German company had ''never formally responded to our initiative­s.''

Delta had been ready to invest 100 million euros and take 10 percent of the capital, which FS said would have resulted in a total investment of 340 million euros over four years.

Atlantia's participat­ion was ''conditiona­l on the resolution of other dossiers,'' Battisti said.

That was a reference to threats by the government to revoke Atlantia's motorways concession following the collapse of a bridge in Genoa in northern Italy in 2018 in which 43 people died.

Atlantia has said it is still interested in finding a solution for Alitalia, but Patuanelli said Wednesday it was ''absolutely unnecessar­y'' to continue talks.

''Alitalia has been in an alarming situation for many years now,'' Umberto Bertele, strategy professor at the Polytechni­c Business School in Milan, told AFP.

He said one of its main issues was the ''imbalance between the number of employees and the number of flights''.

The company has faced extremely fierce competitio­n from low cost companies, but is too small to be able to really compete with other traditiona­l companies either.

It flew just 22 million passengers in 2018, compared to 91 million for Easyjet, 142 million for Ryanair and some 180 for Lufthansa and Delta Airlines.

In Italy its market share stands at 14 percent, far behind Ryanair's 25 percent, and it loses some 300 million euros per year.

FC said it had reached out to some 30 potential investors about an Alitalia rescue, without success.

The best remaining option was for the carrier to ''be integrated into a larger company, as was the case for Swissair or Austrian Airlines, which

were acquired by Lufthansa, and have a well-defined role,'' Bertele said.

That solution would however mean job losses for Alitalia, which currently has some 11,000 employees.

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