Air France Bides its Time on Alitalia Investment as Board Meets
Air France-KLM Group (AF) required more information from Alitalia SpA management as it considers its options, indicating the largest shareholder of the Italian airline may need more convincing before increasing its stake.
“The board considered it vital to hear the information that Alitalia’s executive management should provide at a forthcoming meeting of the Italian carriers’ board of directors,” Air France-KLM said in a statement after its own directors met today to assess the relationship. The Alitalia panel is slated to congregate on Sept. 26, two people familiar with the planned meeting said last week.
Air France, which already owns 25 percent of Alitalia that it bought in 2009, has said it wants to decide this year whether to seek control of Alitalia or move away. Taking full control of Alitalia would help Air France improve access to one of Europe’s key aviation markets and funnel traffic west, at the same time as the investment risks binding funds as the French carrier works to improve its ailing short-haul business.
Italy’s Infrastructure and Transport Minister, Maurizio Lupi, is scheduled to meet with his French counterpart on Sept. 26 to discuss the situation. The same day, Alitalia’s board gathers to review feedback from its banking adviser on plans to raise at least 300 million euros in fresh financing before the end of the year, said the people, who asked not to be identified because the meeting has not been made public.
Air France-KLM’s French division last week met with its central employee committee to discuss plans to end losses in its short-haul and cargo businesses, laying the groundwork for fresh measures including a possible 2,800 job cuts on top of 5,100 already in the works.
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