Company Watch - Alitalia.

Nov 27, 2006

France is apparently reluctant to commit itself on a foray into the Italian market, expectations of a breakthrough faded on Thursday when Prodi told a French newspaper he had many doubts about a possible tie-up between the carriers. Air France KLM is seen anxious to calm any immediate merger talk resulting from the Franco-Italian summit until Alitalia's future becomes more certain. It has repeatedly said Alitalia must be privatized and restored to financial health before their small cross-shareholdings can be expanded into a full merger. Nov 23, 2006

Italian Prime Minister Romano Prodi said in a newspaper interview he had many doubts about a possible tie-up between Air France KLM and Italian carrier Alitalia. A diplomatic source said on Wednesday that Prodi would look into whether the struggling Italian airline could strike a deal with Air France KLM at an Italian-French summit in Italy on Friday. Air France KLM has long been considered a possible suitor for Alitalia, but the Franco-Dutch group has said no merger would be possible until the Italian airline showed it had turned itself around. In a clear reference to French soccer hero Zinedine Zidane's infamous head butting against Italian player Marco Materazzi in the World Cup final in July, Prodi said the two countries needed to avoid "headbutts to the chest" to preserve their strong ties in various fields. Nov 23, 2006

Alitalia flew 3.4 billion RPKs in October, up 2.6% on the year-ago month. Capacity rose 1.7% to 4.51 billion ASKs and load factor improved 0.7 point 75.3%. Nov 20, 2006

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

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Nov 13, 2006