Air France-KLM view on Alitalia unchanged by drag on result

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Air France-KLM has reiterated that it would consider further investment in Alitalia if "strict conditions" were met, after its 25% interest in the Italian flag carrier dragged down its nine-month net result by €137 million ($187 million).

That amount relates both to a "share in the results" of Alitalia and "depreciation of the residual value" of the stake in the Italian airline, in which Air France-KLM is the largest shareholder.

Nonetheless, Air France-KLM remains open to the possibility of extending the partnership. "We are a loyal and serious partner of Alitalia," said Air France-KLM chief executive Alexandre de Juniac during a briefing on third-quarter results. "So it means that we will help Alitalia, but under strict conditions that are industrial, social and financial."

De Juniac sees Alitalia as in need of a "strong restructuring" that would involve "shrinking of medium-haul and stabilisation of long-haul".

Restructuring of the Italian carrier's liabilities is also required, says de Juniac, adding: "Air France-KLM is not in a position to have very deep pockets to finance everything, so the conditions are very clear."

Alitalia shareholders have until 14 November to exercise their option to buy new shares being issued as part of a €300 million capital increase.

De Juniac makes clear his displeasure at a perceived lack of consultation with Air France-KLM during Alitalia's talks with creditors. "We are aware of the results, but we have not been associated [with] the process of the negotiation," he says. "That was the content of what we said to our Italian partners: we would like to have been associated... We are discovering some results at the end of the discussion."

Repeating that Air France-KLM is "a loyal partner" to Alitalia, he adds: "Loyalty means reciprocal loyalty."