[londonlad]

Yes, it looks like they need more cash already.

http://www.euronews.com/business-newswires/2293434-alitalia-to-ask-banks-for-more-funding/

[LuganoPirate]

Told you!

[transtraxman]

This information was given out by Airwise/Reuters on 13th Jan.
“Alitalia To Ask Banks For More Money”
http://news.airwise.com/story/view/1389651265.html
This because it only has enough money for the next six months, something everybody knew when the increase in capital was called upon. So they are already “planning” for the future.

However, nobody has commented on the article published the same day in the same medium (Airwise/Reuters) about Etihad´s interest.
“Etihad ‘Will Not Be Rushed’ Into Alitalia Decision”
http://news.airwise.com/story/view/1389614478.html

All this is reinforced by the piece in Travel Weekly dated 14th Jan…
“Struggling Alitalia to seek more bank funding”,
… which does mention Etihad´s interest in investing up to 40% of the
moribund airline.

How will AirFrance/KLM react?

[LuganoPirate]

Alitalia will bring Etihad down the way Sabena bought Swissair down. If Etihad have any sense they will let Alitalia go then do a deal with the government on saving jobs etc. and pick up the rump for a pittance.

They can then dictate the terms to crew who wish to continue flying without having the unions dictate to them how much they should pay.

Very few take over Italian companies and are still surviving a year later.

[transtraxman]

Isn´t that what AF/KLM is planning? To let Alitalia go bust and then take over the rump?

[BerksTraveller]

I would be sad to see it go. Flew London/Rome/Palermo and back late last year. Clean, comfortable and perfectly on time – in fact I believe AZ might have the best on time record of all European carriers at the moment. What I did notice is they have a lot of staff doing not very much – and having no intention of changing. I asked to buy something on board and was advised “We don’t sell anything on flights of less than 3 hours”, to which the attendant sat back down and carried on her chat with her colleague. The Staff, Unions and Management need to realise this – and quick!

[transtraxman]

The latest chaper in this saga…
“Air France-KLM May Reinvest In Alitalia If Conditions Met”
(Airwise/Reuters: 23 Jan. 2014)

http://news.airwise.com/story/view/1390478822.html

AF/KLM is counterattacking Etihad and has laid out its conditions..
“..wants the airline(Alitalia) to restructure its more than EUR€800 million (USD$1.1 billion) debt, cut costs more aggressively and be willing to come under the Franco-Dutch group’s full control.”
In the latest restructuring AF/KLM´s stake fell from 25 to 7%, so this statemenrt indicates that the franco-Dutch group clearly wants management control at the very least – meaning drastic reorganisation/culling.

Etihad on the other side wants to invest up to 40% of the capital. “(AF/KLM´s)Juniac said he would not get involved in the Etihad talks and was confident that Etihad would not make any hostile move that could jeopardise Air France-KLM and Alitalia’s partnerships, notably in maintenance and cargo.”

That sounds like a threat to me.

My betting is on AF/KLM bagging their prey.
Undoubtedly, more to come.

[CXDiamond]

transtraxman – 26/01/2014 11:43 GMT

Thank you for the update. I’m not sure where I would put my money here but more and more my hunch and that’s all it is is with Etihad. I think AF/KL have in some ways had their day with AZ.

[Haggis73]

Etihad expected to take up to 40% stake in Alitalia.

http://www.bbc.co.uk/news/business-26011191

[Swissdiver]

Then I don’t get the logic of http://www.etihadregional.com/…

[Edski777]

My guess is that Etihad will try to get a foothold in Europe through their stake in Alitalia. Opposition against the increasing (supposedly government funded) expansion of the Gulf airlines in Europe is rising and Etihad will need feeder flights for their long haul flights.
By “helping” smaller companies that are in trouble they can gain marketshare at relatively low cost and worry about the integration at a later stage. So create and expand Etihad Regional, take a bit of Alitalia, a pinch of cooperation with Skyteam members….

I am sure there is a grand strategy behind all this. Wait and see (?).

[transtraxman]

As pointed out by Haggis73 it seems that this partial takeover is in its final stages as reported by Airwise/Reuters 2-2-14.
“Etihad, Alitalia Tie-Up Deal Enters Final Phase”

http://news.airwise.com/story/view/1391380085.html

A couple of quotes from the article are of note.

“Italian Prime Minister Enrico Letta,……..said he had high hopes for a deal and is “flexible” over the possibility of a change in Alitalia’s management.”

That is followed by a classic case of doublespeak to satisfy the unions.
“Alitalia has promised to avoid permanent job cuts as part of a restructuring presented to unions in December, though the airline has said it needs to save EUR€128 million in staffing costs, equivalent to 1,900 job cuts.”

And Alitalia´s management seems to be jumping the gun before any deal is finalised.
“At a meeting with unions on Saturday, Alitalia agreed to use “solidarity contracts”, where people work less and are paid less, rather than a more controversial temporary layoff scheme.”

With 40% Etihad will not have complete control so it will be important to see who remain as large shareholders. If Etihad is outvoted or outmanouvered on changes then the company will just walk away eventually.

What doeth now AF/KLM?

[SimonS1]

The Emirates papers today are suggesting it is conditional on Etihad putting in their own management.

It also talks about a 49% stake, I wonder where this leaves AF/KLM as even a minor stake would give them and Etihad control?

[transtraxman]

The latest news from Airwise/Reuters is that AF/KLM might stll be interested – published Monday 3rd Feb. 2014.
“Alitalia To Agree Loans To Keep Flying”.

http://news.airwise.com/story/view/1391431508.html

Quotes of note……
“One of Etihad’s conditions is for banks to write off parts of the airline’s debt, a source close to Alitalia said, which banks have so far refused to agree to.”

As was AF/KLM´s reply…
“Lack of agreement over a debt restructuring has also contributed to Alitalia shareholder Air France-KLM’s decision to avoid the Italian firm’s cash call. This resulted in Air France-KLM’s stake in the Italian carrier falling to around 7 percent from 25 percent.”

(Del Torchio{Alitalia´s COE} said Air France-KLM remained an “absolutely vital partner”.

“We have a commercial agreement with them that will last at least until 2017, and they remain therefore a viable partner,”)

So what happens now?

[LuganoPirate]

Look to the past to see the future!

I’d like Etihad to look at what happened to Swissair when it bought 49% of Sabena.

However, if it could get AZ to provide it’s feeder traffic into Abu Dhabi from Rome and Milan for onward destinations into Africa and the Far East, it could perhaps turn AZ into a profitable business.

The only caveat is that foreign minority ventures with Italian companies so often end in tears.

[Author]

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