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Company Watch - Alitalia.

Oct 9, 2006

Air France KLM dampened talk of a rapid merger with Alitalia in August, after the Italian flag carrier said a new plan was needed to turn the company around after abandoning a promise to turn a profit in 2006. Oct 4, 2006

Italian premier: Alitalia 'completely out of control'. Italian Premier Romano Prodi yesterday told union leaders that the situation at Alitalia is "completely out of control" and that the government will come up with a plan by Jan. 31 to save the ailing flag carrier, likely through some sort of international alliance or merger, according to press reports. Prodi's office reportedly confirmed the latter in a statement following the meeting, which was prompted by Alitalia's admission last week that its new business plan and recent recapitalization will not return it to profitability. Oct 6, 2006

ANSA reported that Prodi wants the carrier to be the centerpiece of a national air transport strategy. The government holds 49% of the airline. Press reports from Italy indicated that the unions generally were supportive of Prodi's involvement, although some prefer a more compressed timetable. The government is scheduled to meet with embattled Alitalia CEO Giancarlo Cimoli today. Alitalia said in late September that Alitalia Group's net debt as of Aug. 31 was [euro]932 million ($1.17 billion), an increase of [euro]23 million from July 31. Oct 6, 2006

Alitalia To Face New Volare Bid Battle. Alitalia's EUR38 million euro (USD$48.4 million) acquisition of smaller airline Volare was effectively annulled on Monday by a court ruling which ordered a new bidding process, a judicial source said. Volare, which collapsed in 2004 under heavy losses and debt, has valuable slots at Milan Malpensa Airport and the acquisition was part of Alitalia's strategy to regain domestic market share lost in recent years to lower-cost rivals. The Volare buyout was also a defensive move. Alitalia Chief Executive Giancarlo Cimoli estimated lost revenues of EUR125 million (USD$159.2 million) by 2008 if Volare -- and its slots -- went to Alitalia's closest Italian rival, Air One. The judicial source, who declined to be named, said the court ordered the start of a new bidding process within 60 days. The ruling has immediate effect but is not definitive as the court still needs to rule on the merits of the case, the source said. Volare issued a statement saying it was aware of the court decision, but did not confirm the details. Air One, the second-highest bidder for Volare, had argued during its long legal battle that state-controlled Alitalia was an unfair competitor, benefited from state aid and was in no condition to acquire another airline after it narrowly avoided bankruptcy with a EUR1 billion (USD$1.27 billion) capital increase. Alitalia did not immediately comment. Italy's anti-trust agency had already dealt the acquisition a blow by ordering Alitalia to cede four slots at Malpensa for the deal to go ahead. Oct 2, 2006

Editor: Aram Gesar, eMail: edit@AirGuideOnline.com

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Oct 2, 2006
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Date:Oct 2, 2006
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