Chirac backs idea of Air France-Alitalia merger

24th November 2006, Comments 0 comments

LUCCA, Italy, Nov 24, 2006 (AFP) - An alliance between Air France-KLM and Italian airline Alitalia is "desirable," French President Jacques Chirac said Friday after meeting with Italian Prime Minister Romano Prodi.

LUCCA, Italy, Nov 24, 2006 (AFP) - An alliance between Air France-KLM and Italian airline Alitalia is "desirable," French President Jacques Chirac said Friday after meeting with Italian Prime Minister Romano Prodi.

The possible merger "is a problem that concerns two private companies, but they are discussing a rapprochement that is desirable in my opinion," Chirac said after Prodi expressed misgivings about such a deal to the French daily Le Figaro.

The subject was not raised in talks between the two leaders, Prodi told a joint news conference afterward.

Air France-KLM and the financially troubled Italian airline said Thursday they had begun tentative talks on a possible alliance, prompting Italian government suspicions about French intentions.

There has long been talk of a link between Air France-KLM and Alitalia, but the French company has laid down restructuring of the Italian carrier as a condition.

Prodi told Le Figaro he had "many doubts" about a deal between the two airlines, adding that he wanted to know "the true intentions of Air France".

He asked: "Does it want to create a great European air transport group in which Italy has a place, or simply grab the Italian air transport market, which is large and rich?"

Air France-KLM chief executive Jean-Cyril Spinetta said Thursday in Paris that his group had "begun a phase of exploratory exchanges" with Alitalia to study a possible restructuring at the Italian carrier and the savings that might result from an alliance.

Spinetta said the contacts were taking place at the request of Alitalia, which recently forecast a net loss this year that would exceed the 167-million-euro shortfall recorded in 2005.

Air France and Alitalia have had commercial links since July 2001, and Spinetta said "relations with Alitalia have always included the prospect of an eventual merger".

Copyright AFP

Subject: French news

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