17 March 2008

Air France-KLM's Alitalia buy out

Good news for Italy, Italians and for all those poor passengers dreading for their luggage every time the travel irony God led them to the inevitable Alitalia's paths or should I say runways. On Sunday, unanimous the Alitalia board accepted Air France-KLM's offer for $1.1 billion, a last minute a move to save the struggling national carrier.

Good news for the country’s status as well, as Air France will relaunch Alitalia after a restructuring plan and maintain the company’s national identity. Air France has announced plans to transform the world’s most unreliable airline into a profitable company by 2009. It sound’s a bit far fetched, but let’s keep our faith up. Alitalia has been losing $1.56 millions a day, and its cash reserves were down to just $439 million at the end of January, loosing 25 percent in a single month.
No wonder why Air France-KLM’s offer, valuing the airline at $216 millions, far less than expected, was accepted by Alitalia’s board. It may have taken them a good 16 hours but I doubt they had the option to turn it down. The Italian government will be selling it's 50 percent share, as well as the stock market regulator and EU competition authorities. After all, Italy’s outgoing leader Romano Prodi has been striving for more than a year to sell Alitalia.

The Franco-Dutch carrier in a display of nobility declared it will pay $946 million for convertible shares. Maybe they can check around in storerooms for my buddy’s suitcase, never refunded or apologised. Well, what goes around comes around Italianos, C'est la vie!

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