Lufthansa tipped to win race for Al­i­talia

Bangkok Post - - BUSINESS -

MI­LAN: Lufthansa emerged as the num­ber one can­di­date to take over Al­i­talia on Mon­day af­ter an Ital­ian gov­ern­ment min­is­ter called the Ger­man air­line’s bid the “most promis­ing”.

The Ital­ian gov­ern­ment has been look­ing for new in­vestors in its strug­gling flag­ship air­line since it en­tered in­sol­vency pro­ceed­ings last year, hit by com­pe­ti­tion from low­cost op­er­a­tors.

The sit­u­a­tion is fur­ther com­pli­cated by March’s in­con­clu­sive gen­eral elec­tion, from which no new gov­ern­ment has yet been found.

“Al­i­talia is still frag­ile and needs a part­ner. There’s a chance to work on these of­fers and ar­rive at a struc­tural so­lu­tion that doesn’t cost tax­pay­ers any­thing more,” Eco­nomic De­vel­op­ment Min­is­ter Carlo Cal­enda told the La Repub­blica daily.

“Ob­jec­tively speak­ing, how­ever, Lufthansa’s of­fer is the most promis­ing.”

It was put un­der spe­cial ad­min­is­tra­tion in May af­ter staff re­jected plans to cut 1,700 jobs and salaries, and last week was the sub­ject of three ex­pres­sions of in­ter­est, with Britain’s bud­get air­line easyJet one of the other com­pa­nies keen.

easyJet pre­sented a “re­vised ex­pres­sion of in­ter­est for a re­struc­tured Al­i­talia, as part of a con­sor­tium,” with­out pro­vid­ing fur­ther de­tails.

Ital­ian me­dia claimed that pri­vate eq­uity firm Cer­berus and the Amer­i­can air­line Delta Air Lines were easyJet’s part­ners and that the third ex­pres­sion of in­ter­est was sub­mit­ted by Hun­gar­ian car­rier Wizz Air, who de­clined to com­ment when asked about the mat­ter by AFP.

How­ever Cal­enda said that any sale was con­tin­gent on a new gov­ern­ment some­how emerg­ing from the po­lit­i­cal dead­lock.

Two rounds of con­sul­ta­tions held by the Ital­ian Pres­i­dent Ser­gio Mattarella came to noth­ing, as anti-es­tab­lish­ment Five Star Move­ment (M5S) and a right-wing coali­tion led by the far-right League bicker over who should lead a new gov­ern­ment and on what terms.

The dead­line for sale of Al­i­talia was orig­i­nally the end of this month, but the gov­ern­ment will is­sue a de­cree in the com­ing weeks push­ing back that dead­line by around six months while Mattarella searches for a so­lu­tion to the stale­mate.

“We need a new gov­ern­ment, oth­er­wise the in­vestors will not buy,” Cal­enda told La Repub­blica.

How­ever, both the League and the M5S want to re­tain the “Ital­ian­ness” of Al­i­talia, which em­ploy­ees around 11,000 peo­ple.

Last week a Lufthansa spokesman told AFP that they had “sub­mit­ted a doc­u­ment de­scrib­ing ideas for a re­struc­tured ‘NewAl­i­talia’”, while stat­ing that Al­i­talia as it is to­day “is not in­ter­est­ing”.

The spokesman said that if the doc­u­ment was well re­ceived enough “we can imag­ine fur­ther dis­cus­sions”.

The Lufthansa group — which in­cludes Lufthansa, Eurow­ings, Swiss, Brus­sels Air­lines and Aus­trian Air­lines — re­ported record profit for 2017 last month, cel­e­brat­ing a year in which it ended a dis­pute with pi­lots and ac­quired parts of de­funct ri­val Air Ber­lin.

Net profit rose 33.1% to hit €2.36 bil­lion ($2.92 bil­lion), higher than the €2.28 bil­lion pre­dicted by an­a­lysts and hailed by chief ex­ec­u­tive Carsten Spohr as the “best re­sult in the his­tory of our com­pany”.

How­ever Lufthansa asks that the com­mis­sion­ers re­spon­si­ble for man­ag­ing Al­i­talia carry out a pro­found re­struc­tur­ing be­fore any pos­si­ble ac­qui­si­tion.

Last week Cal­enda wel­comed an im­proved pro­posal from Lufthansa, “both in terms of main­tain­ing in­tercon­ti­nen­tal links and staff”.

Ital­ian me­dia claim that Lufthansa has low­ered the num­ber of avi­a­tion jobs it wants re­moved to 4,000 of the cur­rent 8,400. Pre­vi­ously it had re­port­edly planned on 6,000 re­dun­dan­cies.

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