Italian national carrier Alitalia 'unable to confirm or deny' €400m 2006 loss reports as Air France says no to further stake

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Italian flag carrier Alitalia insists it is unable to confirm or deny speculation that its losses mounted up to €400 million ($518 million) last year.

While in announcing third quarter losses in November Alitalia had said it expected one-off gains to help it record an operating profit for the fourth quarter. It has already said full year losses for 2006 would be higher than the €221 million debit recorded in the first half and the €167 million net loss last year.

“In regard to frequent rumours in the press forecasting a negative result for last year of around €400 million, it should be pointed out that at the present time, it is not possible either to deny or to confirm such predictions,” the airline says in a statement, noting this figure appears based on an extrapolation on an annual basis of its pre-tax result for the first nine months.

The Alitalia statement was made in response to information requested by the Italian stock exchange regulator, Consob. On the issue one-off gains, the SkyTeam carrier said it would immediately provide information on the sale on non-strategic assets and non-instrumental real-estate once the operations have been finalised.

Alitalia adds that in the light of the Italian government’s launch of plans to sell at least another 30.1% stake in the carrier – bids on this are expected by 29 January – and because the current Alitalia board no longer has a quorum following the departure of two directors earlier this month, it is not possible as things stand to complete the updating of its 2007-09 business plan.

Meanwhile Air France-KLM is reported to have decided against bidding for its Italian partner Alitalia because of the asking price and conditions attached by the Italian government.

Italy put at least a 30.1% stake in the loss-making carrier on the block at the end of last year and SkyTeam partner Air France-KLM – already a minority shareholder in the airline and partner on Franco-Italian routes – was among the possible bidders for Alitalia. The airline has always left the door open for Alitalia to join the Air France-KLM grouping, but conditional on an improvement in the loss-making Italian carrier’s financial position.

Now French economic daily La Tribune is reporting that Air France-KLM decided at a recent board meeting not to bid for the airline, citing the high asking price and conditions set by the Government. But it adds the carrier might revise this position if a rival – such as Lufthansa or its Italian partner Air One – makes a move for Alitalia.

Air France, as it has consistently since boss Jean-Cyril Spinetta restated the carrier’s position last November, is not commenting on the latest report. In his November comments, Spinetta said the airline would look at Alitalia’s business strategy in terms of its likely success and compatibility with Air France goals, before deciding whether to pursue an interest.

The Italian government, which currently holds a 49.1% stake in Alitalia, has put at least 30.1% of the carrier up for sale and is calling for expressions of interest from would-be investors by 29 January.