Cash-strapped airline Alitalia rejects Ryanair’s collaboration offer

Alitalia has rebuffed an offer from Ryanair to feed passengers into its long-haul routes and help boost the Italian carrier’s profitability.

“Alitalia … has its own strategy, an industrial plan, a fleet and its own crew that allow it to have the necessary passenger traffic to feed its international and intercontinental connections leaving from the hub at Fiumicino airport,” Alitalia said in a statement.

Budget airlines are usually based further from city centers, and Ryanair wanted to leverage the new routes it has secured from Rome’s Fiumicino, which is also Alitalia’s hub.

“Ryanair believes that its offer to feed Alitalia’s international hub at Fiumicino, and seek opportunities to work together and help Alitalia to recover, can help new investors and Alitalia’s management in returning to profitability and reliability,” Ryanair said in a statement.

Alitalia, the target of a government-engineered €500m rescue plan, said it had its own restructuring plan in place and offered similar prices to Ryanair, suggesting the two firms were not natural partners.

“At hub airports in all developed countries, cooperation is avoided between hub carriers and low-cost airlines. It is not by chance that low-cost airlines find space and operate in small airports dozens of kilometers from the cities,” it said.

Italy’s flag carrier has made a profit only a few times in its 67-year history and is running out of cash again.

The deadline for shareholders to subscribe to a 300 million euro capital increase, intended to buy the airline time as it looks for a cash-rich foreign partner, expires on Wednesday.

Earlier this month, Alitalia’s board approved a revised business plan, promising deep cost cuts to make the struggling airline more competitive.

Reuters

Alitalia Bankruptcy Risk If No Capital Injection

Alitalia risks having to file for bankruptcy if no deal on a proposed capital increase is reached in a couple of weeks, a government source said on Tuesday.

Alitalia’s shareholders will vote on a capital increase of at least EUR€100 million (USD$136 million) on October 14 to help keep the company afloat.

“Alitalia risks filing for bankruptcy if no solution on the capital increase is found in a couple of weeks,” the government source told Reuters news agency.

Alitalia needs around EUR€500 million to keep going and to be able to invest in a new turnaround strategy, analysts have said, after accumulating losses of over EUR€1 billion since being privatized in 2009.

Air France-KLM owns a 25 percent stake in the carrier.

(Reuters)

Alitalia Hires Bankers To Tackle Cash Crisis

Struggling Italian airline Alitalia has hired boutique investment bank Leonardo to help tackle a liquidity crisis that may see it running out of cash before year’s end.

The move is aimed at finding ways to raise more than EUR€400 million (USD$527 million) to keep the loss-making carrier afloat, a source familiar with the situation said.

Alitalia has struggled to make a profit throughout its life and has been bailed out repeatedly by the Italian state.

It agreed salary cuts with unions in June and its chief executive and board members reduced their pay by 20 percent ahead of the drawing up of a new strategic plan.

The airline, which quadrupled its net loss to EUR€280 million in 2012 compared with the year before, said in July it needed EUR€300 million this year to keep running but expected to break even by 2015.

The airline, which is 25 percent owned by Air France-KLM, was rescued from bankruptcy in 2008 and bought by a consortium of Italian companies including bank Intesa Sanpaolo, road operator Atlantia and holding company IMMSI, the owner of scooter-maker Piaggio.

The investors might sell out after the expiry in mid-October of a lock-up period, paving the way for new shareholders.

Alitalia said in a statement it had hired the bankers to “assist the company in its relationships with the banks.”

Italian newspapers said last month Alitalia was in talks with Etihad Airways on a commercial deal that might lead to the Abu Dhabi carrier taking a stake.

Alitalia and Etihad were also mentioned in the context of a possible tie-up earlier this year, but Etihad said at the time there were no talks between the two firms beyond those on code sharing.

Etihad was not available for comment but a source at Etihad said that, with a stake in Air Berlin and a commercial partnership with Air France-KLM, Etihad was not keen on another investment in a European carrier.

Alitalia earlier this year hired turnaround specialist Gabriele del Torchio to lead it back to profit.

The airline has pushed back to the end of September the approval of its mid-year financial statement, that was due to be approved by the board, mainly to address a tax dispute.

(Reuters)

Alitalia In Talks With Etihad

Alitalia is in talks with Etihad Airways on a commercial deal that may lead to the Abu Dhabi-based carrier taking a stake in the money-losing Italian company, daily il Sole 24 Ore reported.

Neither Alitalia nor Etihad could be reached for comment.

Citing unnamed sources, the paper said there had been several meetings in recent weeks between managers at both companies, including recently appointed Alitalia chief executive Gabriele del Torchio.

Del Torchio, who is known as a turnaround specialist, was recruited earlier this year to lead the struggling Italian airline back to profitability.

Alitalia, which is 25 percent owned by Air France-KLM, was rescued from bankruptcy in 2008, when it was bought by a consortium of Italian companies including bank Intesa Sanpaolo, road operator Atlantia and holding company IMMSI.

In its industrial plan presented in July, the new CEO said the company planned to increase its financial resources by EUR€300 million (USD$400 million) by the end of this year.

Alitalia and Etihad were mentioned in the context of a possible tie-up earlier this year, but Etihad said at the time there were no talks between the two firms beyond those on code sharing.

(Reuters)