Tag: troubled

Alitalia Administrators Neutral on Delta, Lufthansa Offers

November 6, 2019 / WIL BALDWIN

MILAN, Nov 6 (Reuters) – Alitalia’s administrators said they had no preferred option between Delta Air Lines and Lufthansa, the two groups talking with rail operator Ferrovie dello Stato about a rescue for the troubled Italian carrier.

Ferrovie, which is leading a state-orchestrated effort to rescue Alitalia, will have to choose between the two foreign carriers in the next weeks as the financial performance of Alitalia was deteriorating, the administrators said.

“We do not have any preference about the industrial partner for Alitalia, we are unbiased,” Daniele Discepolo, one of the three administrators in charge of the airline told a parliamentary hearing.

Delta and Lufthansa belong to rival respective airline alliances and are both interested in the lucrative Italian market, one of the world’s top tourism destinations which is seeing good growth in foreign visitors.

Lufthansa wrote to Ferrovie recently offering a commercial partnership with Alitalia and saying it could take a stake in the carrier under certain conditions to be agreed with other partners.

The German carrier, however, has so far refrained from indicating precisely how much it was prepared to pay and under what conditions. In the letter Lufthansa only said it could invest more than Delta, which, so far, has committed around 100 million euros ($111 million) for Alitalia.

Discepolo and fellow administrators Enrico Laghi and Stefano Paleari said the government’s planned grant of a fresh 400 million euros bridge loan was needed to keep Alitalia’s airplanes flying until the rescue was successfully finalised.

The state has already granted a 900 million euro loan for the carrier and analysts calculate that Italian taxpayers have spent more than 9 billion euros to support Alitalia, which has undergone two previous failed rescue attempts.

Paleari said Alitalia’s earnings before interest, tax, depreciation and amortisation (EBITDA) were negative to the tune of 164 million euros in the first half of this year, worsening from a 124 million euro loss in the same period last year partly due to higher fuel costs.

($1 = 0.9020 euros)

(Editing by Susan Fenton)

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)

An Alitalia Airbus A320 takes off on September 26, 2017 from Toulouse-Blagnac airport in southwestern France. / AFP PHOTO / PASCAL PAVANI

Alitalia Rescue at Risk as Suitors Set Conditions

March 13, 2019 / WIL BALDWIN

ROME (Reuters) – Delta Air Lines and easyJet have set strict conditions for investing in Alitalia that could jeopardise a government-led plan to rescue the troubled Italian airline, a source close to the matter said.

Alitalia was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans.

Italy’s populist government, which has made the re-launch of the flagship carrier one of its priorities, is sponsoring a plan that would see state-owned railway Ferrovie inject fresh funds and revamp the carrier together with industrial partners.

Delta and easyJet, which have expressed interest in Alitalia, are in talks with Ferrovie, but the three investors do not see eye to eye on the structure of the deal.

Without an industrial partner fully on board, Alitalia could soon find itself in trouble since neither Ferrovie nor the state have the skills to run the carrier, the source said.

EasyJet has said several times it is interested in Alitalia’s short-haul operations and positions at primary airports, adding the alliance should be commercially viable.

The British low-cost carrier would be open to taking a stake of 15 percent in the Italian airline but only if it wins control of certain Alitalia assets, the source said.

That condition has irritated the three special commissioners in charge of the airline, who fear it could lead to a break-up of the company. The administrators have the power to decide on the offers.

At the same time Delta is also planning to take a 15 percent stake, spending around 100 million euros in the proposed 900 million euro (773.6 million pounds) rescue plan, but does not want to inject more than that, the source said.

A participation of 30 percent or less by the industrial partners, compared with a stake of around 40 percent Ferrovie was counting on, would force the government to find additional investors, probably among state-controlled companies, a second source said.

Ferrovie is expected to take a stake of between 30 and 49 percent in the new carrier, the second source said, making a full involvement of Delta and easyJet crucial.

According to Italian newspaper Il Messaggero, Ferrovie CEO Gianfranco Battisti will fly to Atlanta in the coming days to try to convince Delta’s CEO Ed Bastian to pump more money into the rescue plan.

Ferrovie, easyJet declined to comment on the issue, while Delta was not immediately available for comment.

Ferrovie is racing against the clock to meet a March 31 deadline set by the Italian government to present a rescue plan for Alitalia.

Should that deadline be missed, it would jeopardise the repayment of 900 million euro state loan to the airline, which must take place by the end of June.

(By Giselda Vagnoni. Additional reporting by Francesca Landini in Milan, Alistair Smout in London, Tracy Rucinski in Chicago, Writing by Francesca Landini; Editing by Keith Weir)

Alitalia Administrators Neutral on Delta, Lufthansa Offers

Alitalia Set for Temporary Reprieve as Rescue Deadline Nears

Alitalia Rescue at Risk as Suitors Set Conditions

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