EU clears Air France-Alitalia alliance

7th April 2004, Comments 0 comments

BRUSSELS, April 7 (AFP) - The European Commission approved Wednesday a strategic alliance between Air France and Italy's Alitalia, which this week warned it could not survive beyond a month without government help.

BRUSSELS, April 7 (AFP) - The European Commission approved Wednesday a strategic alliance between Air France and Italy's Alitalia, which this week warned it could not survive beyond a month without government help.

The European Union executive said it could now clear the cooperation agreement between the two flag carriers after they agreed to surrender take-off and landing slots to restore competition on flights between France and Italy.

"Consolidation of the European airline sector is a long-due necessity," EU Competition Commissioner Mario Monti said in a statement.

"It is in the interest of the airlines themselves, their employees and customers as it ensures the companies' survival and continuity of services in an increasingly open economy," he said.

The French and Italian airlines announced in 2001 that they planned to interconnect their global networks from their main hubs at Paris Charles de Gaulle, Rome Fiumicino and Milan Malpensa.

In July 2002 the commission ruled that their networks were in general complementary but that their alliance could seriously eroded competition between France and Italy.

The airlines agreed to surrender 84 take-off and landing slots at their main airports as a concession to Brussels.

The commission's verdict will be welcome news to Alitalia, whose Giuseppe Bonomi said late Monday that unless the Italian government intervened, the state-controlled airline "has no more than a month to live".

Later Bonomi clarified his statement to say that one month was the deadline which the company had given itself to launch a restructuring plan.

Alitalia meanwhile is keen to enter into a takeover by Air France of Dutch carrier KLM that will create the world's biggest airline by sales.

© AFP
                                                                 Subject: French news

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