Air France-KLM makes preliminary offer for Alitalia

6th December 2007, Comments 0 comments

The French-Dutch company wants to take over the struggling Italian carrier.

6 December 2007

AMSTERDAM/PARIS - French-Dutch airline Air France-KLM announced on Thursday it had made a preliminary offer to take over struggling Italian carrier Alitalia.

In a so-called Letter of Interest, Air France set out all the benefits a merger between the companies could bring for both sides.

"The project foresees, first of all, the re-conquest of the Italian market by Alitalia, notably because of the profitable development of its network, the extension of its brand and the affirmation of its identity," the letter read.

In addition, Air France said that a joint company "can offer its passengers a choice of schedules and destinations unequalled in Europe and the world."

A precise amount of money was not mentioned in the letter. However, the website of the French business daily La Tribune said that the offer would be below EUR 1.1 billion.

Air France noted that at this stage of the process, a Letter of Interest "does not legally commit any candidate."

Jean-Cyril Spinetta, CEO of Air France-KLM, said a possible merger "would not only benefit the passenger, but also contribute to the group's economic and financial goals for 2009 and 2010."

Meanwhile, German carrier Lufthansa said Thursday that it has no plans at present to tender a bid for Italy's ailing airline Alitalia.

"Based on the current level of information available, Lufthansa is not making a bid," a spokeswoman said, amid media reports the German airline was planning to present a bid.

The spokeswoman woman said the German airline had made an exhaustive study of the risks and chances involved in such a takeover.

It was reported that Italy's AirOne might also present a non-binding bid on Alitalia on Thursday.

Alitalia has been in financial distress for many years. In the third quarter of this year, the company suffered a loss of EUR 58 million before taxes.

The airline has particularly suffered because of the competition from low-cost carriers, whose activities in Italy have increased by nearly 50 percent since 2005.

The Italian state currently owns just under half of the company.

[Copyright dpa 2007]

Subject: Dutch news