Despite a loss of Є103 million ($94 million) in the first quarter of the year (Flight International, 21-27 May), Alitalia is forecasting break-even this year and a profit in 2003.

The airline's forecast is better than earlier ones, partly due to the planned sale of assets, which will raise Є270 million, to enable it to concentrate on the core airline business, and the reduction in debt after a planned Є1.4 billion recapitalisation. Revenues and margins are also expected to improve, say chief executive Francesco Mengozzi and president Fausto Cereti.

The first quarter results contain some good news: losses have been cut by half compared to the same period of 2001, while load factors and yields are increasing. Debts, however, are also increasing and have passed Є1 billion.

The 2002-03 plan originally anticipated a net loss of Є53 million for the year, but the airline now hopes to break even, thanks to a new plan aimed at saving Є55 million this year, Є120 million in 2003 and Є200 million in 2004. The reduction of the workforce and new work contracts will provide savings of more than Є230 million in the next two years.

Meanwhile, Alitalia and Air France have completed an exchange of seats on their boards: Mengozzi has joined the Air France board and Air France chief executive Jean-Cyril Spinetta has taken a seat at Alitalia. The exchange of minority stakes (2-3%) is being finalised.

Source: Flight International