Already a member?
Sign in
| Version | User | Scope of changes |
|---|---|---|
| Sep 1 2008, 10:20 AM EDT (current) | jimglab | 354 words added |
| Sep 1 2008, 10:19 AM EDT | jimglab |
Changes
Key: Additions Deletions
Alitalia is restructured as Air France/KLM and Lufthansa look for equity
While Delta and Northwest move closer to a merger in the U.S., Europe’s dominant airlines are taking steps toward consolidation as well, focusing on acquiring equity in smaller and/or financially troubled airlines. Italy’s government, under Prime Minister Silvio Berlusconi, last week came up with a rescue plan for Alitalia, which has been on the verge of bankruptcy for months, after a proposed acquisition by Air France-KLM fell through. Under the new plan, new investors—mostly Italian – would back a newly created company that would take on a shrunken Alitalia operation, after the company declares insolvency in court, which it did late last week. The “new” Alitalia would reportedly combine operations with Italy’s second-largest airline, Air One, based in Milan. Air France-KLM is still in the picture as well, saying that it is willing to become a minority partner in the new Alitalia, which would reportedly shrink from its current network of 190 destinations to 140. According to press reports from Italy, Lufthansa is also interested in buying a piece of the new Alitalia. The plan requires a change in Italy’s antitrust laws, since the Alitalia/Air One combination would reportedly control more than 60 percent of Italy’s air travel market.
Meanwhile, Lufthansa – which already owns Swiss International Airlines – is now looking at another European acquisition: The German carrier is reportedly angling to buy 45 percent of Belgian-based Brussels Airlines, an intra-European carrier that was formed by the merger of SN Brussels Airlines and Virgin Express two years ago. The proposed minority acquisition would also reportedly involve an option for Lufthansa to buy the rest of the airline in the future. The U.K.-based Virgin Group is the largest shareholder in Brussels Airlines, with just under 30 percent. Lufthansa is also one of several companies said to be interested in buying the 42 percent stake in Austrian Airlines that is currently held by the Austrian government. Austrian Airlines has been looking for new investment in the face of its own financial problems. Other potential investors are said to include Turkish Airlines and Air France-KLM.
