Alitalia news: auction collapses, government mulls options

[Bravo]

http://www.lifeinitaly.com/news/news-detailed.asp?newsid=9134

[ItaliaAmerCruzLady]

So, it looks like we are still hanging.,..

Thanks Bravo, for the update, BTW, how did you like your Med Cruise on the Freedom? Thats why we have Alitalia booked, for our June Med cruise.

[Bravo]

So, it looks like we are still hanging.,..

Thanks Bravo, for the update, BTW, how did you like your Med Cruise on the Freedom? Thats why we have Alitalia booked, for our June Med cruise.

 

It was fantastic! We started with two days pre-cruise in Rome we flew direct on Alitalia. Every port was great but Venice was the best when you first enter the canal it's like a dream. I suggest that you have your camera ready for great pictures. We did a lot of tours on our own, we used buses, train, taxi. We used one private car in Livorno for Pisa and Florence. We had the best time we are planing on taking the same cruise again in 2009. If you need any info you can e-mail me at carmenbravo@aol.com

[ItaliaAmerCruzLady]

Bravo, that is our intention , to fly straight to Rome, on Alitalia, hopefully, that will still happen, we wanted to go 2 days pre cruise, but one of our travel partners, couldnt do it with her work, soooo, its only one day before in Rome, unless something drastic happens with this airline and we have to change, hopefully not too much. We are very excited, first time to Europe . If I think of stuff, I will certainly ask, thanks.

[golani]

Because we have reservations on Alitalia for June19th, I also have been concerned about its precarious position. However,we booked on Delta and our flights are Delta + Alitalia co-shares that are operated by AZ.

I called Delta to find out what I could do if our flights were cancelled.

It would cost $200 per ticket plus the difference between the old and new fares to change our flights at this time.

However, the Delta agent told me that we would be "protected" if AZ cancelled our flight. I asked him what "protected" meant and he said that Delta would guarantee that we would be rebooked on one of their flights or a flight of of a cooperating airline at no additional price. I didn't have the foresight to ask if they would guarantee that the new flight would be on the same day or close to the same arrival and departure times.

I hope this info will be valuable to those who share our predicament.

[ItaliaAmerCruzLady]

Thank you for that info, I would think we would be doing the same thing. Hopefully with a similar itiniery. I did understand that switching now would be more costly.

[Globaliser]

BBC News reports:-

Exit polls place Berlusconi ahead

 

Veteran centre-right leader Silvio Berlusconi has a narrow lead in Italy's general election, exit polls suggest.

 

Mr Berlusconi, 71, a billionaire, is bidding for a third term in office. His main rival is centre-left leader Walter Veltroni, formerly mayor of Rome.

 

Exit polls showed Mr Berlusconi's bloc marginally ahead for both the lower house and the Senate.

 

The election was held three years ahead of schedule, following the collapse of Romano Prodi's centre-left coalition.

 

With the economy a key election issue, both men had promised modest tax cuts and reductions in bureaucracy.

 

Exit polls have proved unreliable in the past in Italy, correspondents caution. Official results may not be issued until Tuesday.

 

...

And there's a long piece about Alitalia (and the Air France bid) in today's Daily Telegraph:-

Alitalia future in the balance as Air France takes flight

 

High-octane politics in the shape of Silvio Berlusconi has created uncertainty around the Italian flag carrier, says Malcolm Moore

 

The future of Alitalia will be decided today, with Air France poised to walk away from a deal if Silvio Berlusconi triumphs in the Italian general election.

 

Mr Berlusconi, 71, who is tipped to win the vote, has repeatedly said he will not allow the government's 49.9pc share in the airline to fall into foreign hands, accusing Air France of "colonialism".

 

Air France walked away from the Italian flag carrier last week, saying it had been "backed into a corner" by the airline's nine unions. But it left the door open to its €139m (£112m) offer, equivalent to 10 cents a share.

 

However, sources close to the deal said Air France was unlikely to return to the table in the face of opposition from Mr Berlusconi. "Air France always made it clear that its bid was dependent on support from the government," said one insider.

 

The stricken Italian airline is now flying on vapours. It has just €170m in cash and is burning through it at the rate of at least €3.5m a day. By the end of May, its jets could be grounded.

 

Enac, the Italian civil aviation authority, warned on Saturday that Alitalia's cash situation is now so dire that it may be forced to revoke the company's licence to operate in the coming days.

 

"If Alitalia does not explain in the next two or possibly three weeks how it intends to restore at least 12 months of liquidity, we cannot do anything other than suspend the licence," said Vito Riggio, the president of Enac.

 

...

If you're holding Alitalia (055) tickets, it seems to me that it would be worth looking to see what alternative flights there would be on alternative carriers, starting with alliance partners (including Delta). You probably won't be able to do anything unless and until Alitalia actually goes out of business, except if you're prepared to pay the change fee and any difference in fare, because any change made now while Alitalia is still in business would be classed as a voluntary change. But it will be worth having the information, so that you know what all your alternatives are and are ready to move quickly should something happen. Being able to suggest options to the telephone agent while you're talking to them can sometimes get you results that you wouldn't get if you relied on them to come up with ideas.

[nolaAlive]

http://www.avionews.com/index.php?corpo=see_news_home.php&news_id=1088360&pagina_chiamante=index.php

 

 

Airlines

01:27 pm - Monday

Alitalia, while waiting votings' results, AirOne announces a new proposal

Rome, Italy - Share increases in Piazza Affari

(WAPA) - Results of the political's votings would show next moves about Alitalia affair.

 

In according to some national press sources, AirOne is going to negotiate again. Carlo Toto, Ap Holding's manager, would be intent to present a new proposal "Obviously it will happen after to make a short due diligence on Alitalia's counts".

 

In the morning, Alitalia share had an "Theoretical" increase of 6% at Piazza Affari, reaching EUR 0,5.

 

Today, airline's shares will be deal with an only auction's phase and the denial of any inlet's proposals with no price's limits.

 

 

(Avionews)

(071) 080414132719-1088360 (World Aeronautical Press Agency - 2008-04-14 01:27 pm)

[want2cruiseagain]

We have just received word from our Italian friend, who is a pilot for Alitalia, that Berlesconi just won election for prime minister of Italy. He is promising that he will save Alitalia. We shall see.

 

Our friend, at the time we visited him in July last year, was not worried. But last week, my DH spoke with him, he was worried. They had laid off 800 pilots. His seniority position is not in jeopardy at this time.

[Bravo]

http://www.lifeinitaly.com/news/news-detailed.asp?newsid=9188

[Globaliser]

[berlusconi] is promising that he will save Alitalia. We shall see.

We shall indeed.

 

Politicians' talk is cheap.

 

But getting the money is expensive. And not just small change - more like $1 billion. It would be difficult in ordinary times. But now, when nobody's lending anyone any money ...

[cpu0079]

Hi,

I have purchased Alitalia return ticket in June 07 with one year validity. I have used one side from Mumbai to Milan. But now they cancelled flight to Mumbai. So I will not be able to use return ticket. I contacted Alitalia office and they offered me flight Milan-Frankfurt-Mumbai. Frankly speaking, I do not want to go through connecting flight as I have paid more (as it is direct flight). Can any one suggest me how can I get refund of my unused ticket (ticket is still valid).

Thanks,

CPU.

[Globaliser]

Hi, cpu0079, and welcome to CC!

 

It sounds like you did not already have a specific flight booked. So my initial feeling is that you will have an uphill struggle trying to get a refund except on the terms of the fare that you have paid.

 

If you already had a specific flight booked, and that was later cancelled, then I think that you would have the right to reimbursement of the full cost of the ticket at the price at which it was bought, for the part or parts of the journey not made. This right is provided by Article 8(1)(a) of Regulation 261/2004 (EC), which provides compensation rights for air passengers. (Of course, you'd need proper advice specific to your circumstances to see whether this is correct, and you shouldn't rely on what I say here!)

 

But I think that it is probably the case that if you basically have an open return, you assume the risk that by the time you book your return journey, there is no longer any direct service by the airline to your destination and you have to accept a connecting itinerary. No airline guarantees that its schedules will remain the same, or that there will still be direct service to every destination in its earlier network. You are still able to fly from Milan to Mumbai. You just prefer not to fly it in the way that Alitalia can still offer, namely by a connecting route. That's life. (However, I'm puzzled by Frankfurt - without looking at schedules, I would have thought it more likely that you'd fly Alitalia via Rome, unless Alitalia just doesn't fly to Mumbai any more.)

 

You might want to try your query in a more specialist forum, too: try FlyerTalk.

[Globaliser]

AFP reports the following, after Air France made a final decision not to return to the negotiating table:-

Alitalia flies into unknown as bankruptcy looms

 

ROME (AFP) — Alitalia flew into the unknown on Tuesday after Air France-KLM withdrew its takeover offer, leaving Italy's long-struggling flag carrier with little choice but to contemplate bankruptcy or receivership.

 

The French-Dutch giant shut the door on exclusive negotiations in an announcement late Monday ending three weeks of speculation that it might return to the table it left on April 2.

 

Alitalia, with little cash on hand and haemorrhaging funds, appears to have little choice but to go into receivership and almost certain bankruptcy.

 

Trading in Alitalia shares was suspended on Tuesday as the company was expected to issue a statement following the Air France-KLM pullout.

 

...

[Globaliser]

From the Wall Street Journal:-

Alitalia's License Could Be Revoked

 

ROME -- Italian aviation authorities warned on Tuesday that they could revoke Alitalia's license if it cannot meet its obligations, including safety guarantees, after Air France-KLM abandoned an offer that might have saved the struggling Italian airline.

 

...

And from CNN:-

Italy government to meet 6:30 p.m. Tuesday on Alitalia - PM's office

 

MILAN, Apr. 22, 2008 (Thomson Financial delivered by Newstex) -- The Italian government will meet Tuesday evening at 6:30 p.m. to discuss Alitalia SpA, said the office of prime minister Romano Prodi.

 

Earlier today, government sources said ministers were likely to meet tomorrow on Alitalia and the possibility of a bridging loan for the airline.

 

...

Sorry to be the bearer of bad news, but things really do not look good at the moment.

[Globaliser]

And Muggins here has just worked out why Air France's announcement was made when it was: They did not want to overshadow the Pope's visit to the USA or to cause offence until he was on his way home, as Alitalia was providing his wings!

[FlyerTalker]

I wonder....given Berlisconi's (sp?) wealth and position within the Italian government.....why doesn't he just toss some money out there and buy Alitalia?

 

The answer....he knows how Italian businesses and unions are!!!

[ItaliaAmerCruzLady]

So, as far as our booked flights go, what do you think? We are booked for June 27th from JFK to Rome and then a return flight July 9 back to Jfk. We are still cooling our heels, not wanting to make a move and lose our fully paid tickets.:eek:

[ab0si]

The (outgoing) Italian government approved a 300 million euro loan today. I am fairly sure this is illegal under EU regulations, but it still makes sense because:

 

1) If the airline died under the current government, they would never have been forgiven. This way, they can dump the problem Belblowhard.

 

2) I assume they are hoping there are positive results from Aeroflot discussions. By the time the EU gets around to enforcement, it will be a done deal.

 

The amount of the loan seems to be slightly less than what would be required to bring the airline's cash up to the standard required by Italian law. I assume ignoring this minor little detail was informally blessed.

 

Paul

[Globaliser]

2) I assume they are hoping there are positive results from Aeroflot discussions. By the time the EU gets around to enforcement, it will be a done deal.

Somewhere in the last couple of days, I read someone's comment that the Commission already has something like 50 infraction actions pending against Italy, so neither Prodi nor Berlusconi is going to worry too much about one more. :)

 

Seriously, though, I think that's a bit too sanguine. Alitalia is such a high profile case that if Berlusconi sticks two fingers up at the Commission, he will pay a heavy political price.

 

In the meantime, today's news reports quote Berlusconi as having gone back to promising an Italian solution within a few weeks:-

ROME, April 23 (Reuters) - Italian prime minister-elect Silvio Berlusconi said on Wednesday an Italian business group plus banks and airlines -- none of whom were named -- would make a bid for Alitalia after a few weeks of due diligence.

 

But he told Italian radio that a home-grown takeover would still mean "painful" reductions in personnel at the loss-making airline, where trade unions rejected a bid by Air France-KLM because it involved job cuts.

 

...

An Italian solution? Un maiale sta volando oltre la mia finestra! This is not Switzerland!

[ab0si]

Thanks, Globaliser.

 

I see that the commission is already making noises about a quick review of the loan. I also see that the "few weeks" of due diligence is now up the five and, of course, the brilliant Italian businessmen who be making this investment remain unnamed.

 

Paul

[Bravo]

http://www.lifeinitaly.com/news/news-detailed.asp?newsid=9329

[Globaliser]

A few interesting articles have turned up today.

 

Thomson Financial reports (via forbes.com):-

Berlusconi slams EU on its doubts over Alitalia loan

 

ROME (Thomson Financial) - Italy's incoming prime minister Silvio Berlusconi has criticised the European Commission for questioning a move by the state to bail out cash-strapped flag carrier Alitalia SpA with a loan.

 

'They are making things difficult,' Berlusconi said at a public meeting, the domestic news agency ANSA reported. 'But I'm not worried by this question, the European Union should help just causes and not create difficulties.'

 

...

The New York Times has this:-

Alitalia Aid Faces European Commission Scrutiny

 

By STEPHEN CASTLE and NICOLA CLARK

Published: April 24, 2008

 

BRUSSELS — Italy’s moribund national airline, Alitalia, on Thursday became an early test case of relations between the new Italian government and European Union regulators.

 

The European Commission, under pressure from rival airlines, said it would look into whether a loan of 300 million euros or $478.5 million approved this week by the Italian government to the carrier constitutes illegal state aid.

 

The commission said it would request information about the terms of the payment, expressing doubts about Rome’s contention that it was a purely commercial arrangement.

 

The move is the first potential point of conflict between the European Commission and the new Italian Prime Minister, Silvio Berlusconi, who clashed with European colleagues on several occasions during his last term as the country’s premier.

 

Rival airlines quickly sought to put pressure on the authorities in Brussels.

 

“We, as I am sure will every carrier in Europe, will be watching the situation with interest to see what transpires,” a spokesman for British Airways, Michael Johnson, said.

 

Ryanair, the Dublin-based low-cost airline, said Thursday that it would file a complaint with the European Union, arguing that the proposed loan “makes a mockery of E.U. state aid rules.”

 

...

 

Beyond the question of the loan’s legality, analysts said it was not at all clear that the financing would ultimately change the fate of Alitalia.

 

“It’s not clear whether this doesn’t just prolong the bedside agony,” said Dan Solon, an aviation analyst in Barcelona. ‘”It is hard to see what set of domestic Italian players could come in with anything better than what Air France-KLM put on the table.”

 

A German government official expressed doubt that Alitalia would be able to survive as an independent airline and suggested that a takeover by a foreign carrier would be not be the worst possible outcome.

 

...

 

“Given that the whole ship is actually sinking, the only thing that money can do is pump a bit of air into the hold for a while,” said Peter Morris, chief economist at Ascend, a London-based aviation consultancy. Whether or not the aid from Rome is found to be illegal, he said, “is largely irrelevant at this point.”

And The Economist, ever reliable as a source of analysis, says:-

Good money after bad

 

Apr 24th 2008 | MILAN

From The Economist print edition

 

Why Milan resists any sale of Alitalia to Air France-KLM

 

ITALIAN taxpayers learnt on April 22nd that they had just lent €7.50 ($12) each to a near-bankrupt company. The outgoing centre-left government nodded through a loan of €300m to Italy's national flag-carrier, Alitalia, which is debt-laden and losing €1m a day. Normal business criteria have rarely mattered for Alitalia. But this time such considerations have been entirely blown away by the Italian election. The future of Alitalia will now be settled by politics, and maybe diplomacy. It presents Silvio Berlusconi, the prime minister-elect, with his first big challenge. And it constitutes an early test of his commitment to economic liberalism.

 

Romano Prodi, who will remain Italy's prime minister until early May, convened his cabinet after Air France-KLM, the only firm ready to buy Alitalia, withdrew its bid. It gave no reasons, but they are not hard to guess. Two conditions for the bid were approval by trade unions and by the incoming government. Air France-KLM secured neither. Talks with the unions broke down on April 2nd. One reason was that Mr Berlusconi had already called the bid “offensive” and announced an alternative deal with a consortium that would guarantee the airline's italianita.

 

His opponents accuse him of dreaming up a non-existent counter-offer so as to play the nationalist card in the election. He insists that there are interested investors, but that they need time to prepare an offer. And since Alitalia is running out of cash (at the end of March, it had only €170m in the kitty), a loan was essential.

 

Mr Prodi was only too happy to extend one. It dumps the question of Alitalia's future squarely into Mr Berlusconi's lap (although it may fall to Mr Prodi to persuade a sceptical European Commission that a loan to an otherwise insolvent company does not constitute illegal state aid). The outgoing government had contemplated a sum of, at most, €150m. But the loan was doubled at Mr Berlusconi's request.

 

...

[shabal57]

There is a website: http://www.news.airwise.com which has up to date airline related news.

 

It states that Alitalia will most likely still be operating at least over the next couple of months. I know that eases my mind since I am flying with them in 4 weeks. I hope it helps out some other folks.

[ItaliaAmerCruzLady]

No new news on Alitalia? Has anyone heard anything about flight restrictions as far as luggage or fluids?

I am hanging on the idea that it will still be in operation through my flight time, end of June. Just dont want to scramble at the last min for a flight before my cruise!