UPDATED
Troubled Alitalia has secured stop-gap funding following a board meeting on Friday, meaning it should to avert the prospect of its flights being grounded this weekend.
Reuters reports that the Italian government is mounting another attempt to save the carrier from bankruptcy after unions warned the airline could default on debts, meaning that supplies of fuel could be cut off and flights grounded. However, emergency funding, including €150 million from shareholders and banks has been agreed, according to the news agency.
The meeting was scheduled for yesterday, but was postponed at the last minute while the Italian government tried to persuade investors to stump up loans. Under European Community rules, governments are forbidden from using state money to prop up ailing airlines. Italy’s postal service has reportedly stepped in with a loan of around €100 million, but Alitalia has not been profitable for a decade and needs cash injections and credit totalling €500 million, according to union estimates.
Fellow Skyteam member Air France/KLM owns 25 per cent of the carrier, but has so far not come forward as a knight in armour. Air France was barred from coming to the rescue when Alitalia went bankrupt in 2008, when then Prime Minister Silvio Berlusconi instead assembled a group of Italian investors. However this is now seen as the only viable long-term option.
Air France/KLM has said it will only invest if certain conditions are met, likely to include curbing Alitalia’s long-haul expansion ambitions and becoming a leaner operation in order to compete with Ryanair, which has eaten into Alitalia’s home market very successfully over the past decade.
Gary Noakes
