Air France chairman, Jean-Cyril Spinetta, has emphasised that the French flag-carrier is still interested in Alitalia, but not at any price.

"The interest is mutual. It has to be shared or nothing can happen," Spinetta says, picking out the north Italian business market as a key attraction. However, as is the case with CSA Czech Airlines, he remains convinced that a period of commercial co-operation is preferable before equity stakes are taken: "A common understanding can be worked out in the course of a commercial alliance."

With this in mind, SAir appears to have edged ahead of Air France in the bid to attract Alitalia. Analysts point out that while Alitalia hopes for a partner, the Italian government, and the treasury in particular, is interested in selling a stake in the airline. SAir, which has taken stakes in a number of airlines, is thought to be more willing to go down this road.

The teething problems at the new Milan Malpensa hub are well-documented: "It will be easier to find a partner once this issue is resolved," says Andrew Light, an analyst at Schroders Salomon Smith Barney. "If the outcome is that you can't expand at Malpensa, then this may alter the choice of alliance partner," Light says.

Spinetta, however, is in forgiving mood when its comes to Malpensa: "You have to run these novelties in," he says, comparing the situation to that of Air France when it decided to enter the cargo market.

He adds that the open skies deal with the USA may be fully phased in by 2002 rather than 2003. US carriers have been adding frequencies more quickly than Air France, Spinetta says, which means that his airline has some slack to add new routes.

After this, AirFrance and US partner Delta Air Lines may go for anti-trust immunity, although Spinetta stresses that codesharing yields around 60-70%of the available cost savings which would flow from a full alliance.

Source: Airline Business