Company Watch - Alitalia.

Oct 16, 2006

Alitalia Needs Restructuring, Not More Aid - EU. The solution for loss-making Italian airline Alitalia lies in a restructuring of the company rather than more state aid, the European Commission said on Wednesday. Oct 11, 2006

Alitalia Group acknowledged last week that its airline unit will not break even this year as it predicted in its business plan and admitted that survival will be difficult despite this year's state-guaranteed [euro]1.3 billion ($1.7 billion) recapitalization. Alitalia noted in a report obtained by Il Sole 24 Ore. The document precedes a meeting between the government and Alitalia's unions scheduled for Tuesday and a parliamentary hearing with the carrier's chairman and CEO, Giancarlo Cimoli, the following day. Alitalia blamed the Civil Aviation Authority, excessive union power and LCCs. It argued that Italy's airline sector needs more consolidation. It is keen to join Air France KLM but the group repeatedly has insisted Alitalia must be profitable before discussions can move forward. Oct 9, 2006

Alitalia reported a first-half net loss of [euro]221.5 million and is expected to post a full-year loss of at least [euro]300 million before one-off capital gains. Oct 9, 2006

Editor: Aram Gesar, eMail: [e-mail]

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Oct 9, 2006