Lufthansa emerges as frontrunner in bidding for Alitalia | Business| Economy and finance news from a German perspective | DW | 16.04.2018
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Lufthansa emerges as frontrunner in bidding for Alitalia

Italy's government is leaning toward Germany's flagship carrier as the number one candidate to take over the country's insolvent airline Alitalia, with a minister calling Lufthansa's bid the "most promising."

As the government in Rome is looking for new investors to rescue insolvent airline Alitalia, Economic Development Minister Carlo Calenda told newspaper La Repubblica on Monday that "objectively speaking, Lufthansa's offer is the most promising."

Alitalia entered insolvency proceeding last year as it was no longer able to compete against low-cost carriers in Europe's increasingly tight aviation market.

Read more: Lufthansa profits soar after Air Berlin demise

Since then, three companies have expressed an interest to take over Italy's flagship airline — with two of them having stepped forward only last week.

Britain's budget airline EasyJet is one of them after presenting on Friday a "revised expression of interest for a restructured Alitalia, as part of a consortium," without providing further details. Italian media speculated that private equity firm Cerberus and the American airline Delta might be EasyJet's partners in the bid.

In addition, an "expression of interest" was also submitted by Hungarian carrier Wizz Air. Lufthansa already announced its interest in buying a "restructured Alitalia" shortly after the airline filed for insolvency in 2017.

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Lufthansa eyes Alitalia

German concessions

In May 2017, Alitalia was put under special administration after staff rejected plans to cut 1,700 jobs and salaries.

Lufthansa reportedly submitted a document last week outlining ideas for a restructured "NewAlitalia", while stating that the airline was currently "not interesting." The German airline is said to have asked the commissioners responsible for managing Alitalia to carry out a profound restructuring before any possible acquisition.

Italian media claim that Lufthansa has lowered the number of aviation jobs it wants removed to 4,000 of the current 8,400. Previously it had reportedly planned on 6,000 redundancies.

Read more: Lufthansa wants to create 'a new Alitalia'

Calenda has welcomed an improved proposal from Lufthansa, "both in terms of maintaining intercontinental links and staff."

"There's a chance to work on these offers and arrive at a structural solution that doesn't cost taxpayers anything more," Calenda told La Repubblica on Monday.

Italian politics

Alitalia's situation is however further complicated by Italy's inconclusive general election in March, from which no new government has yet been found.

According to Calenda, any sale was contingent on a new government somehow emerging from the political deadlock.

Two rounds of consultations held by the Italian President Sergio Mattarella came to nothing, as anti-establishment Five Star Movement (M5S) and a right-wing coalition led by the far-right League bicker over who should lead a new government and on what terms.

"We need a new government, otherwise the investors will not buy," Calenda said, adding that both the League and the M5S wanted to retain the "Italianness" of Alitalia, which employees around 11,000 people.

The deadline for the sale of Alitalia was originally the end of this month, but the government will issue a decree in the coming weeks pushing back that deadline by around six months while Mattarella searches for a solution to the stalemate.

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Lufthansa's insatiable appetite for growth

uhe/jd (Reuters, AFP, dpa)

 

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