12 April 2008

Alitalia Shares Halt

What's the deal lately in the travel industry with bad news coming straight on top of good ones? Heathrow's brand new Terminal 5 is causing tremendous amounts of stress while the echo from the opening ceremony is still mingling with the frustrated crowd in its great hall.
The second set of bad news comes from Italy. Air France-KLM was closer than ever and anyone to acquiring and finally salivating the troubled Italian airline Alitalia. A barrage of disagreements though, sank negotiations deep in the Mediterranean sea.

Alitalia's outgoing chairman Maurizio Prato had warned unions that the firm risked going bankrupt unless a deal was reached. Unions though got stubborn, went on a strike and even came down on public demonstrations. Consequently, Mr. Prato’s departure from Alitalia’s chair shouldn’t come as a surprise and the company’s board was running from one emergency meeting to another looking for a replacement.

The Italian government, having a 49.9% stake in the firm, "is sitting on very hot coals" so it would check again if Air France-KLM's decision to withdraw from talks is final. Having previously failed to reach an agreement, which led to Maurizio Prato’s resignation, unions now agreed to negotiate again. Even that though didn’t affect Alitalia’s rock-bottom financial situation so it was considered unavoidable to suspend Alitalia’s shares. All trading in Alitalia shares was actually suspended last week and quoting Mr. Prato after the collapse of the negotiations he said "This company is cursed: only an exorcist can save it".

The Italian government has been trying for more than a year to sell its stake in the troubled national airline and now has actually run out of bidders. Failure to reach any agreement leaves the state-owned airline on the ropes just days before general elections. Maybe the one and only Silvio Berlusconi, who is opposing the governmental sale of Alitalia, will be elected again. With the current turn of events he could actually be the “white knight” who will rescue the Italian carrier and restore its reputation.

Although I doubt... what's your speculation?


Anonymous said...

Great Article!!! I sure hope that Alitalia doesn't go under and crash. I think their a great airline that provides a decent amount of destinations. Their food could be a little better though :)




Anonymous said...

I really hope that they do crash completely; they have been torturing their customers for too long.
This will be a wake up call for other airlines to shape up or shut down.

Anonymous said...

Its true that Alitalia has been tormenting their clients for a long time.

But as far as "crashing completely"... i don't know, why do you go so far?