Alitalia Invites Anti-Trust Speculation Amid Bankruptcy and Merger Proceedings
Alitalia, the state-owned flagship air carrier of Italy with hubs in Rome and Milan, has filed for bankruptcy protection. Market observers believe that protection from creditors is essential as the airline shapes a reconstruction plan around combining various parts of its operation with rival carriers.
Alitalia may merge with Italy’s second-largest carrier, Air One; the combined fleet would dominate the Italian market with a share of around 60 percent. However, Air France has expressed interest in buying a minority share in the airline, and Italian officials are also talking with Germany’s Lufthansa. British Airways is also rumored to have expressed interest in Alitalia.
Italian officials have already pronounced a special decree that suspends anti-trust and merger regulations to help Alitalia restructure. Watchdogs with the European Commission have may be more hesitant to allow an international expressed concern over the latest in a string of moves favorable to Alitalia. European officials will require that any future moves to save the air carrier must conform to international standards and benefit workers.
The European Commission is currently investigating Alitalia over the latest in a series of infusions of capitol from the Italian government, which may give it an unfair advantage in the marketplace.
Alitalia is also under investigation by the European Commission as a member of the so-called SkyTeam. The Commission may levy siginificant fines on airlines in the alliance, including Alitalia, Air France, Delta, Northwest and others, because they are not acting as true competitors in the marketplace.
Alitalia is expected to have lost €600 million this year notwithstanding state financial assistance, which is in accord with a long history of financial losses. The carrier has lose some €3.7 billion in just the last decade. Its complicated financial picture is exacerbated by difficulty in crafting solutions that meet the needs of all relevant crediting, political, governmental and labor parties. Because the European Union forbids the Italian government from offering further financial assistance, and the latest round of merger talks with Air France-KLM broke down earlier this year, Alitalia is seeking protection from creditors combined with restructuring.
One possible Alitalia bail out envisions the carrier splitting into two separate firms. The first will carry all of the company’s debt. The second component will merge with a profitable rival air carrier. The new entity will gain all of Alitalia’s landing rights, pilots and various physical holdings, a generous infusion of capital, and new management.
Alitalia is expected to offer uninterrupted service as restructuring proceeds.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
Alitalia may merge with Italy’s second-largest carrier, Air One; the combined fleet would dominate the Italian market with a share of around 60 percent. However, Air France has expressed interest in buying a minority share in the airline, and Italian officials are also talking with Germany’s Lufthansa. British Airways is also rumored to have expressed interest in Alitalia.
Italian officials have already pronounced a special decree that suspends anti-trust and merger regulations to help Alitalia restructure. Watchdogs with the European Commission have may be more hesitant to allow an international expressed concern over the latest in a string of moves favorable to Alitalia. European officials will require that any future moves to save the air carrier must conform to international standards and benefit workers.
The European Commission is currently investigating Alitalia over the latest in a series of infusions of capitol from the Italian government, which may give it an unfair advantage in the marketplace.
Alitalia is also under investigation by the European Commission as a member of the so-called SkyTeam. The Commission may levy siginificant fines on airlines in the alliance, including Alitalia, Air France, Delta, Northwest and others, because they are not acting as true competitors in the marketplace.
Alitalia is expected to have lost €600 million this year notwithstanding state financial assistance, which is in accord with a long history of financial losses. The carrier has lose some €3.7 billion in just the last decade. Its complicated financial picture is exacerbated by difficulty in crafting solutions that meet the needs of all relevant crediting, political, governmental and labor parties. Because the European Union forbids the Italian government from offering further financial assistance, and the latest round of merger talks with Air France-KLM broke down earlier this year, Alitalia is seeking protection from creditors combined with restructuring.
One possible Alitalia bail out envisions the carrier splitting into two separate firms. The first will carry all of the company’s debt. The second component will merge with a profitable rival air carrier. The new entity will gain all of Alitalia’s landing rights, pilots and various physical holdings, a generous infusion of capital, and new management.
Alitalia is expected to offer uninterrupted service as restructuring proceeds.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
Labels: eu competition law, eu law, european antitrust lawsuits
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