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An Alitalia A330-200 touches down in Toronto (Photo: BriYYZ from Toronto, Canada (Alitalia A330-200 EI-DIP) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons)

Alitalia Sale Process Speeds Up Definition After Italian Election

After the excitement of the Italian general elections was over, the future of Alitalia entered a stage of definitions. The commissioners of the extraordinary administration process decided a few months ago to postpone any ruling about Alitalia’s future until the elections passed. The measure was logical and necessary, since moving forward with the sale or liquidation process could be used by any faction to gain some votes.

So, how does this political result influence the future of Alitalia? La Liga, the primary sector of the majority center-right coalition, refuses to sell the airline to Lufthansa. The Left Center is interested in advancing on a minority state participation, but now its position in government is quite weakened. The 5 Star Movement, second in the elections, is interested in the Italian state regaining total control of the company and nationalizing the airline.

The administration committee has been evaluating the chances of moving forward in a holding with state-managed railway company Ferrovie dello Stato, to create a conglomerate that complements the domestic offering instead of competing for the same destinations. For now, it is just an idea that is being evaluated. However, it is getting some support from Italian citizens, as numerous other airlines offer combined air and rail fares.

On the external front, Lufthansa continues to press the European Union to speed up the sale. Lufthansa does not deny its interest in the company, but affirms that it needs massive cuts. There are many voices that claim that LH wants to keep some assets, but not the entire company.

The great competitor of Carsten Spohr’s company is the new conglomerate formed by Delta, Air France, Cerberus Capital Fund and Easyjet. It is said that they would have made an offer for the company as it is and that they await the approval of the board of directors to move forward with the binding proposal. Meanwhile, Alitalia is showing strong operation numbers and has been named the most punctual company in the world last January.

It is speculated that Alitalia’s administration board will make the decision about the company before the end of April. On the financial side, a line of credit is open until September this year and the company is generating profit. Whoever takes the airline in a future will need to find the balance between a profitable operation and the emblematic image of an Italian iconic.

Pablo Diaz
Pablo Diaz
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