Alitalia (Merged)
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Bloomburg are reporting that AF/KL have beaten LH and reached an agreement at $300million for 25% of the new company.....
Bloomberg.com: Europe
However, it's not clear whether this is new equity or a stock transfer from the existing stockholders....
Bloomberg.com: Europe
However, it's not clear whether this is new equity or a stock transfer from the existing stockholders....
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ELFAA complains to European Commission
Brussels – 8 January 2009. The European Low Fares Airline Association (ELFAA) today submitted a formal complaint to the European Commission against unlawful state aid to Alitalia and its successor Compagnia Aerea Italiana S.p.A. (CAI).
CAI / Alitalia will benefit from state aid in the region of €100 million per annum over a seven-year period thanks to the ‘Save Alitalia Decree’. In this highly controversial law, the Italian Government imposed an airport tax of €3 per passenger from 28 October 2008.
This tax not only ensures a constant flow of unlawful aid to CAI / Alitalia, but also offloads the cost of the subsidies onto CAI’s competitors.
John Hanlon, Secretary General of ELFAA, said:
“ELFAA members are extremely concerned about the precedent this subsidy sets. This time not only the taxpayer but also the competition pays.”
“Nothing less than the credibility of the European Commission is at stake. If the EU allows Member States to tax foreign companies to finance an ailing national champion, the Single European Market is sacrificed at the altar of economic nationalism.“
“Even before the European Commission ruled in November that Alitalia has to pay back 300 million of state aid, the serial basket case of European aviation got the promise of another mind-boggling cash injection. ELFAA is today calling on the European Commission to put an end to this scandalous state aid and to overturn the ‘Save Alitalia Decree’ and the €3 tax.”
The tax will raise approximately €210m per year by levying €3 on each of the 70 million passengers departing from Italian airports annually. ELFAA will account for approximately 15 million departing passengers at Italian airports in 2009, thus incurring a cost of €45m.
ELFAA’s conservative estimate is that CAI / Alitalia will benefit from roughly €100 million per annum on average in State aid, through changes to the social security system introduced in “decreto Salvalitalia” (the Save Alitalia Decree – Decree 134/2008) of 28 August 2008.
This unlawful aid takes form of:
i) financing Alitalia’s obligation to provide redundancybenefits; and
ii) lowering social security costs for CAI when it employs former Alitalia employees. This aid will further distort the competitive situation in the EU air transport market by allowing Alitalia / CAI to benefit from unfair subsidies to the detriment of all other airlines active in this market.
As published by ELFAA today
CAI / Alitalia will benefit from state aid in the region of €100 million per annum over a seven-year period thanks to the ‘Save Alitalia Decree’. In this highly controversial law, the Italian Government imposed an airport tax of €3 per passenger from 28 October 2008.
This tax not only ensures a constant flow of unlawful aid to CAI / Alitalia, but also offloads the cost of the subsidies onto CAI’s competitors.
John Hanlon, Secretary General of ELFAA, said:
“ELFAA members are extremely concerned about the precedent this subsidy sets. This time not only the taxpayer but also the competition pays.”
“Nothing less than the credibility of the European Commission is at stake. If the EU allows Member States to tax foreign companies to finance an ailing national champion, the Single European Market is sacrificed at the altar of economic nationalism.“
“Even before the European Commission ruled in November that Alitalia has to pay back 300 million of state aid, the serial basket case of European aviation got the promise of another mind-boggling cash injection. ELFAA is today calling on the European Commission to put an end to this scandalous state aid and to overturn the ‘Save Alitalia Decree’ and the €3 tax.”
The tax will raise approximately €210m per year by levying €3 on each of the 70 million passengers departing from Italian airports annually. ELFAA will account for approximately 15 million departing passengers at Italian airports in 2009, thus incurring a cost of €45m.
ELFAA’s conservative estimate is that CAI / Alitalia will benefit from roughly €100 million per annum on average in State aid, through changes to the social security system introduced in “decreto Salvalitalia” (the Save Alitalia Decree – Decree 134/2008) of 28 August 2008.
This unlawful aid takes form of:
i) financing Alitalia’s obligation to provide redundancybenefits; and
ii) lowering social security costs for CAI when it employs former Alitalia employees. This aid will further distort the competitive situation in the EU air transport market by allowing Alitalia / CAI to benefit from unfair subsidies to the detriment of all other airlines active in this market.
As published by ELFAA today
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Do you really believe anything that pompous little gangster says ?
In fact, they probably didn't - much to his anger....Just made a bit of noise to up the price payable by AF/KL.... Otherwise why the Lufthansa Italia thing ?
Now he's wondering what he's going to tell his gangster friends who bought in on the belief that LH would ' help them out later '....But don't feel too sorry for them - not a single eurocent will be lost by any of his ' business partners ' whatever happens.....
In fact, they probably didn't - much to his anger....Just made a bit of noise to up the price payable by AF/KL.... Otherwise why the Lufthansa Italia thing ?
Now he's wondering what he's going to tell his gangster friends who bought in on the belief that LH would ' help them out later '....But don't feel too sorry for them - not a single eurocent will be lost by any of his ' business partners ' whatever happens.....
The Guardian article says Lufthansa has officially given up on becoming Alitalia´s partner, so that leaves AF/KL as the only possible alternative. The "new" Alitalia will be officially launched in five days from now. Well, Lufthansa Italia will be operational on February 2nd:
Business Feed Article | Business | guardian.co.uk
Lufthansa - Lufthansa Italia
Business Feed Article | Business | guardian.co.uk
Lufthansa - Lufthansa Italia
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New Alitalia start
According to Dutch news, Alitalia Newco will start flying tomorrow.
After the rejection of the Air France KLM bid now many moons ago, following Berlusconi's election promises, the government of Italy has taken over the unhealthy parts of Alitalia which are likely to cost over 3Billion euros excluding unemployment payments.
Yet at the same time Air France KLM has now obtained 25% of Newco for 310M euros including an option to buy 100% of this healthy part in 5 years time!
The number of redundancies according to the same article is now almost double what was intended at the original Air France KLM bid....
Now was that smart moves by the Unions?
NOSJOURNAAL - Nieuw Alitalia eindelijk de lucht in
Berlusconi says Lufthansa out of Alitalia race now | Industries | Autos & Transport | Reuters
A reborn Alitalia flies into troubled skies - International Herald Tribune
After the rejection of the Air France KLM bid now many moons ago, following Berlusconi's election promises, the government of Italy has taken over the unhealthy parts of Alitalia which are likely to cost over 3Billion euros excluding unemployment payments.
Yet at the same time Air France KLM has now obtained 25% of Newco for 310M euros including an option to buy 100% of this healthy part in 5 years time!
The number of redundancies according to the same article is now almost double what was intended at the original Air France KLM bid....
Now was that smart moves by the Unions?
NOSJOURNAAL - Nieuw Alitalia eindelijk de lucht in
Berlusconi says Lufthansa out of Alitalia race now | Industries | Autos & Transport | Reuters
A reborn Alitalia flies into troubled skies - International Herald Tribune
Last edited by vanHorck; 12th Jan 2009 at 12:00.
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They obviously didn't check the date tomorrow (and here in Spain if I am not mistaken, Tue 13 is considered unlucky ,unlike the English version of Fri 13. . . . don't know about Italy mind you)
Hope AF see sense (sure the signs will be there) before throwing good money after bad.
Hope AF see sense (sure the signs will be there) before throwing good money after bad.
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NOSJOURNAAL - Air France-KLM koopt kwart Alitalia
The Alitalia Board has approved the 25% deal by AF KLM for just over 300M Euro according to the above
The Alitalia Board has approved the 25% deal by AF KLM for just over 300M Euro according to the above
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Jw 411
okokok .... a cleaned up Alitalia for now
IMHO the biggest challenge will be to change the attitude of the staff (unions) and not let the AF KLM staff absorb any culture from the (old) Alitalia
IMHO the biggest challenge will be to change the attitude of the staff (unions) and not let the AF KLM staff absorb any culture from the (old) Alitalia
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Change the attitude of the staff/unions...Quite hilarious , paisan.
Here's wishing AFKL all the best with their new Italian adventure.
At least cashflow shouldn't be a problem , the only problem will be the direction :-)
Things just got better for OneWorld and StarAlliance
Here's wishing AFKL all the best with their new Italian adventure.
At least cashflow shouldn't be a problem , the only problem will be the direction :-)
Things just got better for OneWorld and StarAlliance
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All Alitalia staff were sacked at the end of last year. About half of them have been rehired at reduced T&Cs and folded into Air One. 'Alitalia' isn't an airline as such, it's a brand of the new entity. This is not a time for militancy, particularly as they will be going head-to-head with Lufthansa italia. Spinetta and Air France haven't put a foot wrong so far, I can't believe he doesn't know exactly what he's doing.
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integrating "the good ones" into Air One may be the best thing that could have happened to Alitalia's staff and the best thing since sliced bread was invented for AFKL's chance to acquire 25% for 300M euro with an option to buy the remaining 75% in 5 years.
It means limited financial risk right now but a big opportunity later should the core of Alitalia redeem itself.
Being a minority shareholder they will be looking to Berlusconi's cohorts for additional funding should it be required. They re only required to be the technical partner in code sharing etc
So I would think AFKL will feel pretty pleased right now
It means limited financial risk right now but a big opportunity later should the core of Alitalia redeem itself.
Being a minority shareholder they will be looking to Berlusconi's cohorts for additional funding should it be required. They re only required to be the technical partner in code sharing etc
So I would think AFKL will feel pretty pleased right now
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And this is how the game is played. Lufthansa wasn’t interested in Alitalia, they are way too busy with other things: BMI, Austrian, SN Brussels, SAS to only name the ones in Europe. They could never spare the management time to sort out (if that is possible) the sucking chest wound that Alitalia is, and it would not have cleared EU hurdles.
These guys (Air France, Lufthansa, BA) put their heads together and are carving up the European aviation map. With BA being allowed to form a more enhanced alliance (merger) with Iberia. This matches what has occurred in the USA, where three groupings will eventually be created (the Delta/NWA takeover is just the start). It is only a matter of time before Continental and United will make the next move. Probably followed by American and US Aiways (or these guys will fold). All these companies are already connected to each other through the worldwide alliances; Star, One World, and Skyteam.
This will leave only smaller carriers to be bought out or added to these three groupings, if they represent a strategic addition.
KLM had already lost 280 million Euros in an attempt to form a fourth airline grouping with Alitalia back in 2001, at the time anchoring a fourth worldwide alliance (WINGS). This failed because of the tremendous mess that Alitalia was back then. Eventually leading to the buyout of KLM by Air France. Air France/KLM willl pay 310 million for a 25% participation in Alitalia (valuing Alitalia at over 1.2 billion euros). As a reference Air France bought 100% of KLM for 850 million euros (and since this takeover KLM has been responsible for close to 2/3 of all the profits generated within the group). Alitalia is going to cost a tremendous amount of management energy, and of course money, but from a corporate point of view, it is a risk worth taking.
As an airline employee it is maddening to see that not all airlines are created equally. Some are allowed to operate by totally different economic rules, and are not held responsible for the consequences of their mistakes. But that is life I guess.
These guys (Air France, Lufthansa, BA) put their heads together and are carving up the European aviation map. With BA being allowed to form a more enhanced alliance (merger) with Iberia. This matches what has occurred in the USA, where three groupings will eventually be created (the Delta/NWA takeover is just the start). It is only a matter of time before Continental and United will make the next move. Probably followed by American and US Aiways (or these guys will fold). All these companies are already connected to each other through the worldwide alliances; Star, One World, and Skyteam.
This will leave only smaller carriers to be bought out or added to these three groupings, if they represent a strategic addition.
KLM had already lost 280 million Euros in an attempt to form a fourth airline grouping with Alitalia back in 2001, at the time anchoring a fourth worldwide alliance (WINGS). This failed because of the tremendous mess that Alitalia was back then. Eventually leading to the buyout of KLM by Air France. Air France/KLM willl pay 310 million for a 25% participation in Alitalia (valuing Alitalia at over 1.2 billion euros). As a reference Air France bought 100% of KLM for 850 million euros (and since this takeover KLM has been responsible for close to 2/3 of all the profits generated within the group). Alitalia is going to cost a tremendous amount of management energy, and of course money, but from a corporate point of view, it is a risk worth taking.
As an airline employee it is maddening to see that not all airlines are created equally. Some are allowed to operate by totally different economic rules, and are not held responsible for the consequences of their mistakes. But that is life I guess.
Ecce Homo! Loquitur...
IMHO the biggest challenge will be to change the attitude of the staff (unions) and not let the AF KLM staff absorb any culture from the (old) Alitalia
BBC 19th January: First strike hits new Alitalia
Italy's newly-privatised Alitalia is facing its first official strike less than a week after its relaunch.
The four-hour strike called by the SDL union began at 0900 GMT. It was called to protest against new hiring policies at the new Italian carrier and uncertainty over the airline's future.
The carrier has been taken over by a group of prominent Italian business leaders which formed an alliance with Air France-KLM, which has a 25% stake. The new Alitalia has set more modest targets than the old one, with its 148 planes making 670 flights daily and serving 70 national and international destinations.
The union has said it may call another 24-hour strike at an unspecified date.
Unofficial protests at Rome and Milan airports marred the launch of the new Alitalia last Tuesday, causing some delays and cancellations, but Monday's strike is the first official walkout of the new era.....................
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Another strike at Alitalia
Well, there is something new and unexpected.
Seems that Lufthansa knew better than to get involved in this completely demented set up and to start their own adventure in Milan (Lufthansa Italia)
I wonder how long it will take for Air France/KLM to regret their little investment.
Lets hope their marriage includes a pre-nup.
Seems that Lufthansa knew better than to get involved in this completely demented set up and to start their own adventure in Milan (Lufthansa Italia)
I wonder how long it will take for Air France/KLM to regret their little investment.
Lets hope their marriage includes a pre-nup.