Bankruptcy protection

Alitalia‘s board on August 29 formalised a request to seek bankruptcy protection, Corrado Passera, the CEO of the stricken carrier’s sale adviser Intesa Sanpaolo was quoted by the press as saying. Italian Prime Minister Silvio Berlusconi‘ s government on August 28 passed changes to a bankruptcy-protection law to fit Alitalia’s needs, a crucial step in its rescue plan for the ailing airline.
The government’s plan reportedly includes breaking Alitalia into two parts: the profitable assets, to be taken over by an Italian group ready to inject one billion Euro, into the airline; and the other assets, which will be covered by bankruptcy protection. The premier’s office said changes were part of a decree approved by Cabinet on August 28. Saving Alitalia has been a priority of Berlusconi’s government since the conservative leader won April elections and returned to power.
He vowed to keep the company in Italian hands and tapped Intesa Sanpaolo as an adviser in trying to sell the government’s 49.9-percent stake in the airline. Alitalia has been losing two million Euro a day — hurt by labour unrest, competition from budget airlines and, recently, high fuel prices. Its shares have been suspended from trading since June.
Berlusconi has stressed that the new Alitalia would remain in Italian hands, and that any foreign airlines would only be allowed to acquire a minority stake in it. Air France-KLM and Lufthansa AG both are negotiating for a possible partnership with a revamped Alitalia and are on equal footing, according to the man who will become chairman of Alitalia. In an interview with La Repubblica newspaper published on August 29, Roberto Colaninno said that a foreign partner is “indispensable” for the Italian carrier. “We are negotiating with both, and they’re going at the same speed,” he was quoted as saying. Colaninno heads a group of 16 Italian businessmen prepared to take over Alitalia’s profitable assets and invest one billion Euro, part of a government plan to rescue the loss-making airline.
This past spring, Berlusconi ran a campaign that was harshly critical of the previous centre-left government’s decision to sell Alitalia to the Franco-Dutch company, and promised that if elected, he would find a consortium of Italian investors instead. Since Berlusconi was elected, Air France-KLM cancelled its bid to buy the Italian flag carrier due to the new prime minister’s hostility to the deal. However, according to local media reports, that government has now decided that it would welcome Air France-KLM back to the negotiating table after all.
The Italian government has apparently come to realise that it still needs to convince a major foreign airline to buy a stake in the resurrected flag carrier if it is to be successful in the future. The country’s infrastructure minister was quoted as saying recently that his government would be pleased if Air France-KLM decided to partner with the soon to be restructured airline. Reports also said that the bank entrusted with Alitalia’s privatisation might try to meet with Air France representatives in the near future.