Air France-klm’s Stand Unclear For Alitalia Capital Increase

Top Comments: Vive la France!

He declined to make any further comment on his position. Air France-KLM, which owns a 25 percent stake, said on Friday it would make a decision on whether to take part in the cash call only after Monday’s shareholder meeting. “The decision by the Air France-KLM board members to support the emergency plan does not in any way presuppose our decision on whether to subscribe to the capital increase,” it said. All shareholders will have 30 days to decide what portion to subscribe. On Friday, the Franco-Dutch airline said it would set “very strict” conditions before giving any help. A source close to the situation said then that it objected to a lack of clarity on Alitalia’s valuation and insisted on much tougher restructuring, believing the emergency plan was not enough. Any of Air France-KLM’s conditions could clash with Alitalia’s long-haul ambitions, analysts said. Alitalia’s new CEO Gabriele Del Torchio wants the company to focus on the higher-margin long-haul market after its plans to become a strong regional player came unstuck due to tough competition from low cost players and high-speed trains. De Juniac has said he could see Alitalia boosting its intercontinental routes where Air France-KLM’s own network might be weak, but his group may want to see some serious restructuring of the Italian company first. STRATEGIC PARTNER Analysts said Air France-KLM remained the natural strategic partner for Alitalia, but the group’s appetite was limited as it pushes through its own unpopular restructuring at home. “I am sure they would strategically want to have Alitalia in their camp, but the last thing they want at the moment is to consolidate a rotting company,” said airlines expert James Halstead, managing partner at UK-based Aviation Strategy Ltd.

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