Rescue Plan for Alitalia is In The Works

Bankers have been working on a plan to salvage Alitalia, and they are close now to a package which will keep the airline in the hands of Italy. However, they will be reducing their network greatly through a partnership with another top European airline. The plan is for the healthier aspects of Alitalia to be merged with Air One, which is a smaller airline in comparison and is privately owned. The parts of Alitalia that are not profitable and a lot of the airline’s debt will be placed into another entity that can sell some of its assets, such as the land around the Fiumicino Airport, in order to decrease the debt of the carrier by about 1.5 billion dollars. The rest of Alitalia’s debt would be assumed by the Italian government.

A partnership between Alitalia and Air One will then receive 1.5 billion dollars from 2 private equity firms, 5 Italian investors, and possibly from 2 Italian and 2 international banks. This should allow Silvio Berlusconi, the Prime Minister, to say that he kept his promise of keeping Alitalia in the air. This new rescue plan will avoid the company being taken over by a foreign company, but will include an arrangement for profit-sharing with a larger European airline, possibly being Lufthansa, Air France KLM, or British Airways, in order to make sure that there is a big network of intercontinental flights. Alitalia will continue to be a very powerful domestic carrier for the market in Italy, while developing in Europe and having an important agreement for profit-sharing on intercontinental routes.

Learn more at: www.alitalia.com