Skyteam news

[Pieter C. 5]

Holy Smokes: when will this, finally, end ?

 

Italy Makes Third Attempt To Sell Alitalia

 

May 30, 2008

Italy on Friday launched its third attempt in 18 months to find a buyer for Alitalia, naming the country's biggest bank as adviser and issuing secretive new rules in the hope of speeding up the ailing airline's sale.

 

The new conservative government said bank Intesa Sanpaolo would seek one or more buyers for the state's 49.9 percent stake in Alitalia, which is struggling for survival after Air France-KLM pulled out of a takeover.

 

Under the new rules, there will be no auction and the government will not be obliged to disclose information about the sale until an offer has been made, unlike the normal requirement for listed companies, Economy Minister Tremonti said.

 

"The situation is so serious and urgent that the usual privatization procedures which failed in the past have to be ruled out," Tremonti told a news conference.

 

He made no mention of a timeframe for the sale nor of any potential buyers, but said Intesa Sanpaolo was free to take part itself in any bid. Intesa's chief executive Corrado Passera declined to comment.

 

Tremonti blamed the previous administration, which first put the state's 49.9 percent stake in Alitalia up for sale in December 2006, for failing to close the deal successfully.

 

"We have learned lessons from the past 18 months," said Tremonti, who took office in Silvio Berlusconi's new government this month.

 

"There is a crisis, there is a failure of the privatization process and Air France is not there anymore," he said.

 

Berlusconi had vocally opposed the Air France-KLM bid for Alitalia and turned it into a major issue in the April election he went on to win.

 

Berlusconi has repeatedly promised that an Italian consortium of investors will rescue Alitalia, but the bidders have so far failed to emerge.

 

"Passera is the only one who can take charge of the situation," said another minister who asked not to be named.

 

Alitalia's board will meet on June 3 to discuss its prospects. The airline received a badly-needed financial lifeline this week, when the government converted a EUR300 million euro emergency loan to the airline into company capital. Tremonti said this was the only way to prevent the national carrier from going bankrupt or being put under special administration.

 

That loan is being scrutinized by the European Commission to see whether it violates rules barring state aid.

 

Alitalia said on Tuesday it had posted a 2007 net loss of EUR495 million (USD$778.3 million) and reiterated it quickly needed fresh capital to keep flying.

 

On Friday, the airline said its short-term liquidity at the end of April fell to EUR174 million from EUR180 million a month earlier, and that its net debt stood at EUR1.36 billion, slightly up from March.

 

The previous government's first attempt to sell Alitalia in an auction ended in failure last July when all the bidders pulled out.

 

The company later began exclusive talks with Air France-KLM after rejecting a rival offer from smaller Italian airline Air One, which was backed by Intesa Sanpaolo.

 

But that deal also fell apart because of union opposition and political pressures during the election campaign.

 

Air France-KLM said this week it seemed "impossible" that it could resume talks with the Italian airline.

 

(Reuters)

 

[Pieter C. 5]

Aeromexico Flight Attendants Threaten Pay Strike

 

May 31, 2008

Flight attendants at Mexican airline Aeromexico are threatening to go on strike on Sunday if they cannot come to an agreement in last-ditch pay talks with the largest domestic carrier, union sources said.

 

Aeromexico flies to 23 cities in Mexico, 12 in the United States, four in South America, two in Central America, three in Europe and two in Asia.

 

The almost 1,500 stewards of Aeromexico, which was privatized last year and bought by a group of investors headed by Citigroup's local bank Banamex, are demanding a 5 percent wage increase.

 

Union members have rejected the airline's latest offer of a rise of 4.25 percent, accompanied by a savings plan that could affect employees.

 

The stewards' union leaders were in talks late on Friday with the company in the offices of the Mexican Labor Ministry.

 

(Reuters)

 

[Pieter C. 5]

Air France Calls For New Single-Aisle Planes

 

June 2, 2008

Air France-KLM Chief Executive Jean-Cyril Spinetta on Monday urged aircraft makers Airbus and Boeing to speed up development of single-aisle models to help boost efficiency amid rising fuel prices.

 

"We want them to speed up delivery of short- to medium-haul aircraft," Spinetta told an International Air Transport Association conference in Istanbul. "The technology is there."

 

He said Air France-KLM was among the airlines heavily using such aircraft and would benefit from flying planes that were more fuel-efficient than current models.

 

Spinetta said the fuel efficiency of Airbus and Boeing single-aisle aircraft, such as the A320 and 737, had not been improved fast enough over the years.

 

Airbus CEO Tom Enders disagreed, saying the A320 had seen tremendous improvements in fuel efficiency over the years.

 

(Reuters)

 

Air France Says Difficult To Restart Alitalia Talks

 

June 2, 2008

Air France-KLM Chief Executive Jean-Cyril Spinetta on Monday did not rule out restarting talks to take over ailing Italian carrier Alitalia but said it would be more difficult.

 

"Discussions can always restart but in the current economic environment I think it's difficult... I cannot commit to my shareholders that doing this in the current economic environment could create value," Spinetta told a panel discussion at an airline conference.

 

Spinetta broke off talks with Alitalia in April after failing to persuade Alitalia's unions to accept his takeover offer, which included a 10 percent staff cut.

 

Since then Italian Prime Minister Romano Prodi, who supported the Air France tie up, has been replaced by Silvio Berlusconi, who is pushing for Italian investors to buy Alitalia.

 

(Reuters)

 

[Pieter C. 5]

Guys,

 

After leaving the EIN-LHR-EIN route with F50 by KLC, effective the Winter 2008/2009 schedules, the RTM-LHR-RTM F50 route will be ceased as well, ending all F50 operations into LHR (ATC will be happy, as is known to be quite annoyed by the 'slow' F50 into their system)...

Slots will be used for other Skyteam long-haul flights ex LHR, most probably for NW

 

So, if you're based in Europe and still want to try the trusty 'old' Fokker 50, across the Northsea, you'd better hurry

 

The RTM-LON connection will be taken-over by VLM, however, they'll operate into/out of LCY...(they must be the biggest operator by now at that airport )

[Mohd Azizul Ramli 2]

AF/KL will acquire VLM too right, very soon? Will the F50s still being retained then? VLM's F50s are mooi!

[Pieter C. 5]

AF/KL will acquire VLM too right, very soon? Will the F50s still being retained then? VLM's F50s are mooi!

 

VLM was sold to AF, for EU competitive reasons (KL couldn't do this)...they will remain in their gorgeous colours (for the time being) and will cooperate with Cityjet

 

Anyhow, here more EU-news on AZ:

 

EU To Suspend Italy's Loan To Alitalia

 

June 4, 2008

The European Commission has decided Italy's EUR300 million euro (USD$467.9 million) emergency loan to Alitalia is illegitimate state aid and must be suspended, newspaper la Repubblica reported on Wednesday.

 

The Commission will formally open a procedure against Italy on June 11, the newspaper wrote, without citing its source.

 

The loan, granted in April by Italy's previous government, was aimed to keep the airline flying while incoming Prime Minister Silvio Berlusconi tried to gather Italian investors to save it from bankruptcy.

 

Those investors have not materialized, meaning the airline will come under renewed financial pressure if the loan is thrown out by the Commission.

 

After the Commission's decision is announced, Italy will have 15 days in which to tell the EU executive how it intends to proceed, la Repubblica wrote.

 

Milan's bourse on Wednesday suspended trading in Alitalia shares, convertible bonds and other financial instruments tied to the company. The bourse had limited trading in the stock, which on Tuesday closed at 0.44 euros, for several weeks to a single daily auction.

 

After campaigning against the previous government's plans to allow Air France-KLM to take over Alitalia, newly-elected Berlusconi softened his stance on Tuesday saying Air France may be a good international partner for Alitalia.

 

However, Air France-KLM has said restarting talks would be difficult. It withdrew a takeover offer for Alitalia in April because of union opposition and political pressures.

 

Berlusconi's new conservative government last week launched the third attempt in 18 months to find a buyer for the airline, which loses more than EUR1 million a day.

 

(Reuters)

 

 

[Pieter C. 5]

Italy Says EU May Allow Alitalia Aid If Privatized

 

June 3, 2008

The European Union may consider allowing aid for troubled Alitalia if it is aimed at privatizing the Italian carrier, Italy's Economy Minister Giulio Tremonti said on Tuesday.

 

"Aid aimed at market operations such as privatization is different," Tremonti said at a press conference after a meeting of European Union finance ministers in Luxembourg.

 

The Italian government decided in April to give Alitalia a loan to keep it flying until a new buyer is found after Air France-KLM pulled out of a deal.

 

Alitalia received the badly-needed lifeline when the government converted a EUR300 million euro emergency loan to the airline into company capital. The European Commission is scrutinizing it to see whether it violates rules barring state aid.

 

Tremonti has said the aid was the only way to prevent the national carrier from going bankrupt or being put under special administration.

 

Italy launched its third attempt in 18 months to find a buyer for Alitalia on Friday, naming the country's biggest retail bank, Intesa Sanpaolo, as adviser and issuing secretive new rules in the hope of speeding up the ailing airline's sale.

 

Under the new rules, there will be no auction and the government will not be obliged to disclose information about the sale until an offer has been made, unlike the normal requirement for listed companies, Tremonti said last Friday.

 

(Reuters)

 

it stinks !!!

 

[Pieter C. 5]

Italy Says EU 'Positive' On Alitalia Decree

 

June 5, 2008

The European Commission appears to have a "positive view" on the Italian government's decree to help Alitalia avoid bankruptcy, an Italian government official has said, citing discussions on an informal level.

 

The comments by Economy Undersecretary Luigi Casero, published in a parliamentary bulletin on Thursday, appeared to play down concerns that the Commission will object to Italy's EUR300 million euro loan to Alitalia to keep it afloat.

 

An Italian newspaper on Wednesday reported that the Commission would declare the loan as illegal state aid and move to have it suspended -- which would leave the ailing carrier with few options other than bankruptcy.

 

The Italian goverment has allowed Alitalia to count the loan as capital on its books and issued new rules on Alitalia's sale, both of which are part of a new decree that came into effect earlier this week.

 

The decree must still be approved by both houses of parliament and was being debated in the lower house on Thursday. It met stiff resistance from an opposition party, which is expected to delay the vote until next week.

 

Still, Prime Minister Silvio Berlusconi's government has comfortable majorities in both houses of parliament and the decree is expected to be approved.

 

(Reuters)

 

Czech Airlines' Cost Savings Outweighed By Fuel

 

June 5, 2008

CSA Czech Airlines, earmarked for privatization, booked a loss of CZK444 million koruny (USD$27.8 million) in the January to April period, as high fuel prices offset cost cuts in what is usually a weak part of the year.

 

The company said on Thursday it had expected a slightly deeper loss of CZK453 million in the first four months. It posted a loss of CZK335 million in the same period a year ago.

 

The state wants to sell the national carrier at the turn of the year, which analysts have said could fetch around CZK4 billion.

 

Revenue rose by nearly 2 percent year-on-year to CZK6.7 billion, above the planned CZK6.5 billion, and the airline repeated a forecast of a CZK391 million net profit for the year, helped by the CZK300 million sale of its catering unit in early April.

 

It earned CZK207 million in 2007, which was the first year in the black after three years of losses. It sees earnings of CZK110 million to CZK340 million in 2009.

 

The carrier had expanded rapidly earlier in the decade but had to sell some non-core assets in a restructuring following losses. It is still burdened by high leasing costs from that period.

 

CSA wants to use its option to buy eight new Airbus A320 aircraft by 2012 to modernize its fleet of 51 planes.

 

The cabinet plans to sell a 91.5 percent stake in CSA in a tender, with the finance ministry expecting interest from peers such as Lufthansa, British Airways, Aeroflot and airlines from China and South Korea.

 

But some government officials have said the cabinet may offer the stake to a Czech-based company or a consortium with a Czech majority to secure its national carrier status.

 

(Reuters)

 

Surprised, Aeroflot is on the list, given the historic 'difficulties' between CzechoSlovakia and the Sovietskaya Soyuza...

 

[Pieter C. 5]

EU To Say Alitalia Loan Illegal, Must Be Repaid

 

June 6, 2008

The European Commission will tell Italy that a EUR300 million euro loan to prevent Alitalia from going bankrupt was illegal and demand the ailing airline pay it back, a Commission source said on Friday.

 

The move would be the latest setback to efforts by Silvio Berlusconi's government to fend off an embarrassing financial collapse of the state-controlled carrier while an 18 month hunt for a new buyer to take it over continues.

 

The Commission will vote on Wednesday to send a letter to Italy with its determination, the source said. If Italy fails to act on the request, the Commission can follow up by ultimately taking the Italian government to European Union courts.

 

A European Commission spokesman said: "We do not comment on press speculation."

 

Italy had been hoping the Commission would permit the loan since it was part of a privatization process and designed to keep Alitalia afloat until a new buyer could be found.

 

Italy's Economy Undersecretary Luigi Casero this week was even quoted as saying informal discussions with the Commission suggested it had a "positive view" on the loan.

 

The loan was given to Alitalia in April as its coffers began to dry up, and Berlusconi's government subsequently allowed the airline to count it as an asset on its books so as to avoid running afoul of stock market rules.

 

The accounting procedure and new rules on the airline's sale both came into effect this week as part of a new decree issued by the government, which owns 49.9 percent of Alitalia.

 

The decree must still be approved by both houses of parliament and is expected to get the go-ahead despite stiff resistance from the opposition.

 

Alitalia has long struggled under the burden of rampant inefficiency, political interference and frequent strikes. It has lately been hit hard by fierce competition from low-cost carriers, high oil prices and a drop in passenger bookings due to fears it may soon go out of business.

 

The airline's passenger traffic fell nearly 26 percent in April, according to the Association of European Airlines, the steepest fall among the carriers tracked by the body.

 

The airline's shares have been suspended indefinitely by Italy's bourse.

 

(Reuters)

 

[Pieter C. 5]

Didn't know where to put this: in *A or ST thread, but since Aeroflot is in the lead here, I choose for ST

 

Aeroflot Ready To Talk On Austrian Airlines

 

June 7, 2008

Russian flag carrier Aeroflot is waiting for the Austrian government's offer to start talks on buying into Austrian Airlines, its general director Valery Okulov said on Saturday.

 

"I think if there are some offers, we will discuss them," Okulov said. "We are looking seriously at the European market and the possibilities of buying assets there."

 

(Reuters)

 

Indeed, OS is a much better 'deal' than AZ

[Pieter C. 5]

Air France-KLM Says Alitalia Dossier Closed

 

June 9, 2008

Air France-KLM dampened Italian hopes of a revival of talks to buy Alitalia, saying on Monday the matter was closed.

 

Air France-KLM withdrew a bid for Alitalia in late April after talks broke down with the Italian airline's unions.

 

Speculation of a deal to fold Alitalia into Europe's biggest airline to help save it from bankruptcy was rekindled several days ago when Italian Prime Minister Silvio Berlusconi said Air France-KLM would be a good partner, softening his earlier stance.

 

Air France-KLM Chief Executive Jean-Cyril Spinetta said however the "dossier is closed".

 

Spinetta made the remark on the sidelines of a company presentation, according to an airline spokesperson.

 

Berlusconi, who earlier this year called Air France-KLM's now-defunct takeover offer for Alitalia "unacceptable", said on June 3 he had discussed the fate of the Italian carrier with French President Nicolas Sarkozy at a meeting last week.

 

"Alitalia will need to find accords with international partners and... Air France could be a good solution," Berlusconi told a joint news conference with Sarkozy.

 

Since withdrawing its bid in April Air France-KLM has said restarting talks would be difficult.

 

Berlusconi's new conservative government last month launched the third attempt in 18 months to find a buyer for Alitalia, which loses more than 1 million euros a day.

 

Alitalia's future has become even more uncertain with the rise in the cost of fuel and a steady decline in bookings.

 

(Reuters)

 

Airline Inclusion In CO2 Scheme Unfair - Air France

 

June 9, 2008

Air France-KLM on Monday voiced concerns over the proposed inclusion of airlines in the European Union's Emissions Trading Scheme (ETS) at a time of high oil prices.

 

The French-Dutch airline said the terms of the system were "discriminatory" and threatened the financial balance of companies already worried about their profitability.

 

High fuel prices and a dip in traffic in the United States and Europe have bankrupted 24 carriers since the start of the year, the International Air Transport Association says.

 

Under proposals being drawn up in Brussels to fight climate change, all airlines using airports in the 27 nation EU would be included in the ETS from 2012, with a cap on their emissions of greenhouse gases.

 

A European Parliament panel voted to include aviation from 2011, one year earlier than envisioned by EU ministers.

 

The panel also voted to make the sector pay for 25 percent of its permits to produce carbon dioxide in the first year, rather than the 10 percent suggested by ministers.

 

The plan would give a competitive advantage to companies which have a hub outside Europe and "should be applied equally to all airline companies", said Pierre-Henri Gourgeon, Air France-KLM's deputy chief executive, at a news briefing.

 

Air France-KLM, the world's biggest airline by revenue, warned last month that high fuel prices would slash operating profits this year, knocking its shares to two-month lows on despite a rise in 2007 operating profit.

 

Oil rose to a record USD$139 a barrel on Friday.

 

The airline industry is struggling to cope with oil prices that have surged 170 percent since the start of 2007 and economic uncertainty in the United States and elsewhere which threatens growth.

 

(Reuters)

 

[Pieter C. 5]

Alitalia Says Bookings Recover After Steep Fall

 

June 10, 2008

Ailing Italian airline Alitalia said on Tuesday its passenger bookings had recovered in recent weeks, after a sharp tumble in April driven partly by fears it might go out of business.

 

The state-controlled carrier blamed cuts in capacity from redesigning its network for the slide in ticket sales but acknowledged that bookings had fallen about 20 percent after the collapse of its planned sale to Air France-KLM.

 

The French carrier's withdrawal from the deal left Alitalia on the edge of bankruptcy, which it managed to avoid thanks to a EUR300 million euro emergency government loan. It has issued urgent appeals for new capital to keep flying.

 

Alitalia's passenger traffic fell nearly 26 percent in April, according to the Association of European Airlines, the steepest fall among the carriers tracked by the body.

 

The airline said the decision to cut back its presence in Milan to focus on Rome did not bode poorly for overall business, noting that its traffic at Rome's Fiumicino Airport jumped nearly 25 percent in April and more than 32 percent in May.

 

The recent trend of an upturn in bookings should reduce the shortfall between its capacity offered and transported in coming months, Alitalia said.

 

Italy has begun its third attempt to sell the airline and its shares have been suspended indefinitely.

 

(Reuters)

 

[Pieter C. 5]

Italy Close To Solution For Alitalia

 

July 23, 2008

Italy is close to finding a solution to rescue near-bankrupt airline Alitalia, Industry Minister Claudio Scajola said on Wednesday, without ruling out the possibility of placing it in extraordinary administration.

 

"I think that a solution is near that will be able to relaunch a company with Italian capital," Scajola said, adding it would be "significant, useful" for Italy as a whole.

 

Asked whether Italy would place the state-controlled carrier in extraordinary administration, Scajola said: "The instruments still must be defined."

 

Alitalia was put up for sale at the start of 2007 by the previous government but attempts to find a buyer for the state's 49.9 percent stake failed.

 

Prime Minister Silvio Berlusconi's government embarked on the latest effort when it took office in May.

 

It picked Italian bank Intesa Sanpaolo as sale adviser and Berlusconi has consistently said he would find an Italian buyer for the airline. Its combative unions helped scupper a deal earlier this year with Air France-KLM.

 

Italian newspapers have carried speculative reports about what a future Alitalia will look like.

 

La Stampa daily reported on Wednesday Intesa Sanpaolo is aiming for a merger with a domestic player and then "a maxi-alliance with... Lufthansa or Air France-KLM or British Airways."

 

La Repubblica reported that, given the likelihood of job cuts, the government might delay any showdown with unions until the start of September to avoid strikes over the busy summer travel season.

 

In a sign that a move towards extraordinary administration may not be imminent, Scajola said he did not believe the cabinet would review the law governing such operations for troubled firms when it meets on Friday.

 

He has previously said the so-called "Marzano" law would need to be modified if it were to be applied to Alitalia.

 

Extraordinary administration is a form of bankruptcy protection for troubled firms in which a special administrator is appointed by the government to run the company. The Marzano law regulates such special administrations.

 

Last week, two investors, Luxembourg-based private equity firm Equinox and holding company Miro Radici Finance, voiced interest in Alitalia's cargo assets.

 

In cargo, Alitalia employs a fleet of five MD-11 freighters. The airline has 179 aircraft in total.

 

(Reuters)

 

[Mohd Azizul Ramli 2]

Now Garuda joins CI, VN and Bangkok Airways to be the potential SkyTeam partner in South East Asia, instead of MH.

 

Korean Air to assist Garuda joining Skyteam

http://www.airlineroute.blogspot.com/

http://www.airliners.net/aviation-forums/g...d.main/4081745/

 

According to Chinese Xinhua News Agency, Korean Air and Garuda Indonesia has signed a Memorandum of Understanding (MoU) for intensive cooperation on flights between Korea and Indonesia. Korean Air will also assist Garuda Indonesia to join Skyteam.

[jani 0]

MAS desperately needs to be in an alliance. And SkyTeam looks like a perfect fit.

 

If Air France are the ones that are forbidding MAS from entering just because they don't want to change their hub from SIN to KUL then I think they are making a big mistake.

 

MAS already has partnerships with Air France, KLM and Northwest and also code-shares with Delta and China Southern.. What else is not right..??

 

Besides the obvious fact that MAS has great connections to Australia and Indonesia.. Star Alliance already has two members in this region!

 

 

 

 

[yeadrian 0]

what a bummer..... Garuda chosen over MH.... AF is doing exceptionally well in blocking MH.....

[jani 0]

Nah, Garuda still hasn't been 'chosen'. They just signed an MoU for Korean to help them.

 

I believe MAS got much more than that.

 

Whatever it is, Star Alliance have Thai and SIA. No reason for SkyTeam to also have two members, though I wouldn't understand the need.

[Pieter C. 5]

Nah, Garuda still hasn't been 'chosen'. They just signed an MoU for Korean to help them.

 

Correct....and, remember, Indonesia (incl. Garuda) is EU blacklisted, so unable to operate into Europe...they've to deal with that first, before even admitted into ST...

 

On another airline:

 

Alitalia Faces Bankruptcy Choice As Board Meets

 

July 25, 2008

Troubled Italian carrier Alitalia will have to decide whether to relaunch via a bankruptcy filing or pursue another option when its board meets on Saturday, as its third attempt at finding a buyer sputters to a close.

 

Alitalia is still flying thanks to an emergency government loan after a planned sale to Air France-KLM fell apart earlier this year, but an oil price surge and a sharp fall in bookings have compounded its long list of troubles.

 

Prime Minister Silvio Berlusconi said on Friday that news agency reports the government was planning to put the company into extraordinary administration, a way of protecting it from creditors, were "totally groundless."

 

The airline loses more than EUR2 million euros a day, and was worth just under USD$1 billion on the market before its shares were suspended in June after Italy relaunched the sale process.

 

Latest figures showed the airline's passenger traffic fell 22 percent in May as it cut capacity and travelers fretted about its uncertain future.

 

Alitalia's board will meet on Saturday, when Chairman Aristide Police will ask its controlling shareholder -- the Italian Treasury -- to declare whether the airline should remain in business, a political source said.

 

"The chairman will ask the Treasury representative to reconfirm the existence of conditions for continuing business or he'll act accordingly and file for bankruptcy," the source said.

 

Berlusconi promised earlier on Friday that Italy was close to resolving Alitalia's fate.

 

"I'm working on it... For now, we have two things: the necessary capital and the slogan 'I love Italy, I fly Alitalia'," he said.

 

The government, which owns a 49.9 percent stake in Alitalia, appears to be in favor of avoiding the bankruptcy option, political and union sources say, despite a widely reported rescue plan by adviser Intesa Sanpaolo that would require it.

 

Those sources say the government has agreed to give turnaround expert Rocco Sabelli the power to carry out Intesa's plan, but without pursuing bankruptcy, and one union source said the decision could be announced as early as next week.

 

Under Intesa's plan, a bankruptcy filing would be followed by splitting off the airline's healthy units in which investors could put in up to EUR800 million, Italian media say.

 

That plan, however, would not be legal unless the government modified Italian bankruptcy law -- a move that development minister Claudia Scajola does not rule out. Intesa and Alitalia would not confirm the plan.

 

Smaller Italian airline Air One's chief Carlo Toto -- who has long sought to buy Alitalia but was rejected in favor of Air France-KLM, has confirmed his willingness to be part of the investor group, a source familiar with the discussions said.

 

Italian media have speculated other investors could include wealthy Italian business families like the Benettons and Fossatis and private equity firm Clessidra.

 

This is the third attempt by the Italian government to sell Alitalia in less than 20 months. An initial auction for the government's stake fell apart last year when all bidders pulled out, while unions scuppered the sale to Air France-KLM.

 

(Reuters)

 

Alitalia's Board Meets To Review Options

 

July 26, 2008

Ailing Italian carrier Alitalia's board held an extraordinary board meeting on Saturday to review its options ahead of a long-awaited rescue plan from its sale adviser, a source familiar with the meeting said.

 

The company confirmed the board held a three hour meeting but said it did not plan to issue a statement on the board's deliberations and declined further comment.

 

Italian media has been abuzz with speculation in recent weeks over a plan being drawn up by bank Intesa Sanpaolo to salvage the loss-making airline after two previous attempts by the government to settle its fate failed.

 

Newspapers have said the plan includes putting the airline under special administration and splitting off its healthy units for prospective investors, but Prime Minister Silvio Berlusconi has denied any plans to put Alitalia in bankruptcy.

 

Intesa representatives were not present at the Saturday board meeting, the source said.

 

A political source on Friday said Alitalia's Chairman Aristide Police was expected at the Saturday meeting to ask the airline's controlling shareholder -- the Italian Treasury -- to declare whether the airline should remain in business.

 

Political and union sources have also said the government will soon give turnaround expert Rocco Sabelli the power to carry out Intesa's plan but without pursuing bankruptcy.

 

Burdened with losses, strikes and rampant inefficiencies, Alitalia is still flying thanks to an emergency government loan after a planned sale to Air France-KLM fell apart earlier this year.

 

(Reuters)

 

[Pieter C. 5]

Alitalia May Run Out Of Cash In Months

 

July 28, 2008

Alitalia could run out of cash after the end of the year without a new injection of funds, Citigroup analysts said, predicting the ailing Italian airline will burn through EUR550 million euros of cash this year.

 

Alitalia was on track to wipe out its cash by the third quarter, but was granted some breathing room by an emergency government loan, the analysts said in a research note.

 

"The government loan of EUR300 million (which is subject to state aid investigation by the European Commission) should help Alitalia survive to the end of 2008 but could be insufficient from 2009 onwards," Citigroup said.

 

Italy's government, which owns a 49.9 percent stake in Alitalia, is working on its third attempt to save the airline after a planned sale to Air France-KLM fell through.

 

Citigroup said a merger with smaller Italian carrier Air One appeared to be the only "meaningful solution" now, combined with a grounding of obsolete planes that would halve capacity. It estimated a EUR1 billion equity injection is needed.

 

The bank painted a grim picture of the airline's financial prospects, forecasting net losses of EUR720 million this year and substantial write-downs on its fleet.

 

It expects Alitalia to post a 20 percent drop in revenues when it reports second-quarter results on August 8, driven by cutbacks in Milan and a 23 percent fall in traffic.

 

(Reuters)

 

[Pieter C. 5]

Angry Chinese Passengers Crash Computers

 

July 29, 2008

Scores of Chinese air passengers smashed computers and desks and clashed with police on Tuesday after a night stranded at an airport without accommodation, state media said.

 

More than 170 passengers were due to leave Kunming, capital of southwestern Yunnan province, on three flights operated by China Southern Airlines late on Monday, but the flights were cancelled due to bad weather, Xinhua news agency said.

 

"All the passengers had to spend the night on the planes or in the departure hall," Xinhua said. "No one came to tend to their food and board."

 

The passengers clashed with airport police on Tuesday morning, smashing computers and desks, Xinhua said, blaming the melee on China Southern staff's "inappropriate working attitude".

 

At around 2 am, many of the passengers -- including toddlers and people over 60 -- took taxis to a hotel where China Southern said they could stay, only to be turned away once they arrived, Xinhua said.

 

Frustration at mysterious delays, diversions and cancellations have at times boiled over into violence at Chinese airports as passengers try to storm grounded aircraft and police are brought in to keep the peace.

 

There have also been cases in which passengers, after delayed arrivals, have refused to get off the planes in protest.

 

(Reuters)

 

 

[Pieter C. 5]

Berlusconi Risks Union Showdown Over Alitalia Woes

 

July 30, 2008

Silvio Berlusconi's election pledge of a patriotic rescue for Alitalia looks set to come back to haunt the Italian prime minister as hopes fade for a painless bailout to keep the airline afloat.

 

Campaigning for the April election, Berlusconi attacked plans to sell the Italian airline to Air France as humiliating. That deal was called off, but Alitalia now faces a far worse scenario -- thousands of job cuts and perhaps even bankruptcy.

 

While a strong majority in parliament means Berlusconi's coalition is not at risk, the magnate faces the prospect of a showdown with unions and transport strikes that could overshadow successes such as resolving a Naples garbage crisis, analysts say.

 

A plan to rescue the state-controlled carrier being drawn up is expected to suggest a bankruptcy filing and cutting 40 percent of its work force. Berlusconi denies any bankruptcy plans but has conceded "sacrifices", ie, job cuts, will be required.

 

"Whatever plan he puts forward is going to put 5,000 people out of a job, and he'll have to take a lot of flak from unions, the far left and some of his own people," said James Walston, politics professor at the American University of Rome. "When it's combined with strikes, he's going to have a hot autumn."

 

Burdened with high costs, strikes and inefficiencies, Alitalia has posted a profit only four times in the past 15 years. It now also faces high oil prices and a drop in bookings.

 

Some analysts predict it will run out of cash after year-end without new funds -- and that's despite an emergency loan from the government in April to prevent bankruptcy.

 

Notorious for their crippling strikes, Alitalia's powerful unions thwarted the sale to Air France-KLM in April over the prospect of far fewer job cuts than those being discussed today. They have already begun making fresh threatening noises.

 

"If the situation demands it, (we are ready for) immediate mobilization, even at the height of summer," said the SDL union that represents a majority of flight attendants, warning of strikes in early September if mass layoffs are announced.

 

"Berlusconi should let us know if his statements were just part of an election campaign or if there is anything concrete and real to it."

 

Wary of taking on the unions, successive Italian governments have preferred to pump more taxpayer money into Alitalia rather than letting it go bust like peers Swissair and Belgium's Sabena airline.

 

Observers say a collapse of the national airline coupled with protests and transport chaos would be especially bad news for image-conscious Berlusconi, who named Alitalia one of two "national emergencies" he would tackle on taking office, the other being the rubbish crisis in Naples.

 

The Italian opposition is also seizing the opportunity to blame Berlusconi for Alitalia's predicament, noting that his jingoistic rhetoric helped unravel the sale to Air France-KLM.

 

"Bankruptcy would be a failure attributable to Berlusconi," said leftist lawmaker Enrico Letta, adding that "workers and travellers would be the first to pay the consequences".

 

On the other hand, consumer groups are attacking Berlusconi for letting taxpayers foot the bill for Alitalia's woes, with one group re-christening Berlusconi's "I love Italy, I fly Alitalia" slogan to "Alitalia flies, Italy pays."

 

With Berlusconi's optimistic rhetoric on Alitalia finding few takers these days, others joined in the lampooning as well.

 

"I love Italy but don't fly Alitalia. Why? Because I love myself," said Francesco Cossiga, an Italian senator for life.

 

(Reuters)

 

 

This is interesting: Air One not buying AZ, but AZ buying parts of Air One

 

Alitalia Plan Foresees Buying Parts Of Air One

 

July 31, 2008

A rescue plan for Alitalia does not foresee a merger with Air One but involves the acquisition of parts of the smaller Italian carrier, the CEO of Alitalia adviser Intesa Sanpaolo told a newspaper.

 

Intesa has been tasked with drawing up the latest plan to salvage Alitalia after a planned sale to Air France-KLM fell apart earlier this year.

 

Under Intesa's plan, a new Alitalia entity would buy Air One's fleet, authorizations for various routes and contracts for new planes without taking on any of the carrier's debt, CEO Corrado Passera told La Repubblica in an interview. Air One chief Carlo Toto in return would get shares of the new Alitalia, the paper said.

 

La Repubblica said it understood from the conversation with Passera that no investor was ready to inject capital into Alitalia in its present state, triggering the need for the airline to split off its parts that could be revived.

 

Italy's government on Wednesday was forced to deny bankruptcy plans for Alitalia after coming under attack from the opposition over mass layoffs expected at the airline as part of the rescue plan.

 

Prime Minister Silvio Berlusconi was criticized by the left and unions for helping thwart a possible deal with Air France-KLM, but Passera maintained the need for a strong national airline.

 

"There isn't a big country in Europe that does not have a flagship airline," said Passera.

 

(Reuters)

 

[Pieter C. 5]

Berlusconi Sees Solution For Alitalia

 

July 31, 2008

Italian Prime Minister Silvio Berlusconi said on Thursday he expects to find a solution for ailing airline Alitalia in the early autumn, later than initially expected.

 

Bank Intesa SanPaolo, the adviser appointed by the government to draw up a rescue plan for Alitalia after a takeover by Air France-KLM fell apart, was due to present its proposal by mid-August.

 

However, there has been speculation the government, fearing protests over the restructuring from Alitalia's notoriously feisty unions, may try to buy more time to avoid possible strikes and transport chaos in the busy summer season.

 

"I think that at the beginning of the autumn we will be able to reach the result that we want and that is to keep Alitalia as a national carrier, making profits," Berlusconi said in a TV interview.

 

"We have the certainty of an industrial plan that holds water, the capital and the investors are there, we are negotiating with foreign companies," said Berlusconi, who had opposed the deal with Air France-KLM. He did not mention names.

 

He suggested job cuts might be necessary but gave no specific figures.

 

"I think we will have to assess how many people the new company will be able to employ to function. But the only alternative is bankruptcy and therefore 20,000 people would lose their jobs," he said.

 

Berlusconi's government was forced to deny bankruptcy plans for Alitalia on Wednesday after coming under withering attack from the opposition over estimated layoffs of around 5,000 people expected as part of the rescue plan.

 

Alitalia only remains airborne after a EUR300 million euro cash injection from Berlusconi's government, which is under scrutiny by Brussels.

 

Some analysts this week said the airline could run out of cash after the end of the year unless it gets fresh funds.

 

Net debt stood at EUR1.12 billion at the end of last month, in line with the end-May level, while short-term liquidity totaled EUR375 million.

 

Under Intesa Sanpaolo's plan, a new Alitalia entity would buy up domestic rival and former suitor Air One's fleet, authorizations for various routes and contracts for new planes without taking on any of the carrier's debt, Intesa Sanpaolo CEO Corrado Passera told La Repubblica in an interview.

 

La Repubblica said "it understood" from the conversation with Passera that no investor was ready to inject capital into Alitalia in its present state, triggering the need for the airline to split off parts that could be revived.

 

(Reuters)

 

[Pieter C. 5]

Korean Air Posts First Loss In 5 Years

 

August 14, 2008

Korean Air Lines on Thursday reported its first quarterly operating loss in five years, hit by higher oil prices and slowing demand.

 

Korean Air is expected to benefit from recent falls in oil and fuel prices in the second half, but its outlook remains clouded by a weaker won and a sluggish global economy, analysts said.

 

Korean Air, also the world's largest air cargo carrier, posted a KRW116.4 billion won (USD$112 million) operating loss in the second quarter on June 30.

 

The operating loss was the first deficit since the second quarter of 2003, when Asia's airlines were hurt by an outbreak of Severe Acute Respiratory Syndrome (SARS).

 

The operating loss compares to a KRW75.4 billion profit in the second quarter of 2007 and a KRW19.6 billion profit in January-March of this year.

 

Jet fuel prices rose 40 percent from the beginning of this year until late July.

 

Korean Air used 1.2 percent less fuel in the second quarter from a year ago, but spending on fuel, the company's single-biggest cost item accounting for around 40 percent of its operating expenses, surged 80.4 percent.

 

To help South Korea's airlines cope with higher fuel expenses, the government allowed them to raise surcharges from July.

 

High oil prices have rattled airlines worldwide. Cathay Pacific Airways, Asia's number 3 carrier, posted a surprise net loss of USD$85 million for the January-June period. World number 2 carrier Singapore Airlines marked a 15 percent fall in second-quarter net profit.

 

Korean Air also reported a KRW288.9 billion net loss during the April-June quarter, as a weaker won weighed on fuel bills and foreign currency debt servicing costs.

 

It compares with a KRW214.4 billion loss a year earlier and a KRW325.5 billion loss in the previous quarter.

 

The softer won currency may hurt demand for overseas trips as South Korean travellers tighten their belts and as it boosts the cost of importing fuel.

 

"Even during this year's summer vacation, I only see single-digit growth in demand, instead of the usual 10 percent rise for the period," said Han Byung-hwa, an analyst at Hyundai Securities.

 

The South Korean currency fell 8.6 percent against the dollar in the second quarter from a year ago, according to central bank data.

 

Reflecting the concerns, shares in Korean Air, valued at USD$3.3 billion, lost 7.9 percent in the second quarter, underperforming a 1.7 percent fall in the wider market.

 

(Reuters)

 

[Pieter C. 5]

EU Delays Decision On KLM/Martinair Deal

 

August 20, 2008

The European Commission on Wednesday delayed its ruling on a planned purchase by Air France unit KLM of all of Martinair Holland, in which it already held a 50 percent interest.

 

The review procedure has been extended by 10 working days, the Commission said in a statement.

 

Martinair offers charter and scheduled services and also specializes in freight services.

 

(Reuters)

 

[Pieter C. 5]

Air France Hires Adviser To Look At Austrian

 

August 21, 2008

Air France KLM has hired Lazards to study an eventual acquisition of a stake in Austrian Airlines, which is being privatized, the newspaper Les Echos said in its Friday edition.

 

The Franco-Dutch airline and other bidders have until Sunday to officially express their interest.

 

Air France KLM had no immediate comment.

 

Last week, Turkish Airlines said it was interested in principle in becoming a strategic partner in Austrian.

 

Austrian's board has screened possible buyers and sources close to the board said this month a majority support Lufthansa.

 

The board sees Turkish Airlines, along with Air France-KLM and Aeroflot, as second choices.

 

Austria's OeIAG is offering its entire 43 percent stake in Austrian, worth around EUR157 million euros, but said the size of the stake sold would depend on preserving an Austrian group of core shareholders owning 25 percent between them.

 

(Reuters)