Tag: doubt

Air France-KLM’s Future in Doubt Without Cost Cuts – Dutch minister

September 13, 2020 / WIL BALDWIN

AMSTERDAM (Reuters) – Air France-KLM <AF.PA> might not survive its current crisis if the airline group cannot lower its costs, Dutch Finance minister Wopke Hoekstra said on Sunday.

“The survival of Air France-KLM is not a given,” Hoekstra said in an interview on Dutch public television.

“They will have to address their cost base even as things stand now. And suppose this situation lasts until the end of next year, then they will have to cut even deeper.”

Air France-KLM’s immediate future was secured by the French and Dutch governments in July, as they provided a total of 10.4 billion euros ($12.3 billion) in bailout loans and guarantees to help the group survive the disastrous effects of the COVID-19 pandemic on air travel.

In return for the support, Dutch arm KLM has said it would cut another 1,500 jobs, reducing its staff by 20%, while a pay hike agreed for 2020 was frozen by the company.

French arm Air France plans to cut 6,500 jobs, or 16% of its workforce, through 2022.

So far, however, KLM has failed to reach an agreement with unions on the cuts needed to meet the requirements set by the Dutch government.

Hoekstra indicated a thorough restructuring would be necessary for governments to contemplate further support.

“KLM will always be very important for the Dutch economy. But the question is whether that will be enough”, he said.

Air France-KLM said last month that it was losing 10 million euros per day due to the coronavirus crisis.

(Reporting by Bart Meijer; Editing by Susan Fenton)

Italian Airline Alitalia’s Rescue in Doubt as Atlantia Backtracks

November 19, 2019 / WIL BALDWIN

MILAN, Nov 19 (Reuters) – Italian infrastructure group Atlantia said on Tuesday it was not ready to join a consortium led by Italian railway group Ferrovie dello Stato to rescue loss-making carrier Alitalia, casting a shadow on the entire project.

After months of negotiations and with just one day left before a deadline expires, the group controlled by the Benetton family said that the conditions did not exist yet for it to join a consortium working on Alitalia.

Atlantia added, however, it remained available to engage in negotiations to seek for an industrial partner for the carrier.

A deadline to present a binding offer for Alitalia expires on Thursday, after being postponed several times.

Loss-making Alitalia has been run by special administrators since May 2017 and talks led by Ferrovie have been going on for a year without a deal.

The carrier, which is burning through its cash reserves, is expected to finish its money at the end of this year.

Ferrovie and Atlantia have been in talks with both U.S. carrier Delta Air Lines Inc and, recently, with German airline Lufthansa.

Delta said it was ready to invest 100 million euros ($111 million) in the Italian carrier but sources had said it did not agree with Ferrovie and Atlantia over the development of the Italian carrier’s long-haul business.

On the other hand, Lufthansa said it was prepared to set up a commercial partnership with the Italian carrier but did not want to take a stake in the group before it has gone through a complete restructuring.

“We will not invest in current Alitalia, but we are interested being a commercial partner,” said Lufthansa CEO Carsten Spohr at an event in Berlin on Tuesday.

Italian daily La Repubblica on Tuesday said the airline could be nationalized for some years before being sold.

Analysts calculate that Italian taxpayers have spent more than 9 billion euros to support Alitalia, which has undergone two previous failed rescue attempts.

($1 = 0.9028 euros)

(Reporting by Francesca Landini; Additional reporting by Ilona Wissenbach in Berlin; Editing by Lisa Shumaker)

Alitalia Set for Temporary Reprieve as Rescue Deadline Nears

October 14, 2019 / WIL BALDWIN

MILAN, Oct 14 (Reuters) – Alitalia is set to win a temporary lifeline on Tuesday, when its latest rescue deadline expires, with toll road operator Atlantia expected to give a conditional green light to hundreds of millions of euros of investment, according to two people close to the situation.

The future of the troubled Italian carrier remains in doubt with no binding offer and no clear business plan in sight but it should avoid an immediate liquidation after the expiry of the Oct. 15 deadline set by the industry ministry.

Atlantia, which is controlled by Benetton family, has been in talks since July over taking part in a government-orchestrated rescue of the airline, together with railway group Ferrovie dello Stato, the treasury and Delta Air Lines.

“Atlantia is expected to give its commitment to invest in Alitalia subject to several conditions,” one of the sources said. But issues that still cause concern range from potential antitrust problems, treatment of state aid under European Union rules, the cost of possible redundancies and the future of the carrier’s long-haul routes, the source said.

Oct. 15 is the latest in a series of deadlines set for Ferrovie and potential partners in a rescue for Alitalia, which has been under special administrators since May 2017 and needs new funds to continue flying.

The board of Atlantia, which runs Rome’s airports through its Aeroporti di Roma unit, is expected to approve a preliminary commitment to the Alitalia rescue on Tuesday, the sources said.

The rescue plans include potential investment of a total of around 1 billion euros in the carrier, which has cut costs under the special administrators but still burns cash and had only 310 million euros left at the end of September.

Atlantia is expected to invest some 300 million euros, depending on commitments from other partners.

A second source said more time was needed to iron out a complete business plan for Alitalia. Possible involvement by Delta Air Lines or Germany’s Lufthansa AG is still under discussion.

A third source said Atlantia, Ferrovie and other potential partners were under pressure from Italy’s Industry Ministry to present a binding bid and take control of the carrier which in the past two years has already received 900 million euros from the state to stay afloat.

Atlantia’s participation in the rescue was put in doubt this month when it wrote to the Industry ministry, urging a radical overhaul of the Alitalia plan if talks were to go ahead.

(Reporting by Francesca Landini, Stefano Bernabei, Giuseppe Fonte. Editing by Jane Merriman)

Air France-KLM’s Future in Doubt Without Cost Cuts – Dutch minister

Italian Airline Alitalia’s Rescue in Doubt as Atlantia Backtracks

Alitalia Set for Temporary Reprieve as Rescue Deadline Nears

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