Italian regional Gandalf Airlines claims it may make a move for the far larger Meridiana as it seeks a partner to aid its growth strategy. Bergamo-based Gandalf has taken heavy losses since its launch last year, but has completed the expansion of its capital base in a move which will help fund growth.

Gandalf chief Luciano di Fazio says the new resources will allow it to double its fleet and find a strong partner, with Meridiana, Italy's second largest carrier, among potential targets. Meridiana is up for sale, with its 79% owner, the Aga Khan, planning to pull out.

Several flag-carriers have shown an interest in Meridiana, although recent events may eliminate some. British Airways, for example, recently launched its own National Jets Italia franchise, and is in talks to merge with KLM in a move that could eliminate the Dutch carrier as a possible buyer. Air France, meanwhile, is regarded as a possible partner for Italian flag-carrier Alitalia. SAir already has Italian operations - soon-to-merge Air Europe and Volare - and Lufthansa has a stake in Air Dolomiti.

The expansion of Gandalf's capital to 55 billion lire ($26 million), raising 30 billion lire, saw most existing shareholders buying more shares, while a second stake offered was fully subscribed. Gandalf needs cash to add to its six Fairchild Dornier 328JETs (three more arrive before year end) and four 328-200 turboprops. Flight Inter-national sister publication Air Transport Intelligence says the airline may also take over two undisclosed Italian 328 operators, and is looking at larger aircraft.

Gandalf lost 9.9 billion lire on sales of 17 billion lire last year, a situation which worsened this year, with first half losses of 8.5 billion.

Source: Flight International