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April 9, 2008 |
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ALITALIA SPA: May Lose License if Cash Hike Remains Unclear Ente Nazionale per l'Aviazione Civile, Italy's regulatory body of air transport activities, may revoke Alitalia S.p.A.'s license in the next three weeks if the national carrier cannot come up with a recapitalization plan, Bloomberg News reports citing ENAC chief Vito Riggio. Mr. Viggio said ENAC will meet with officials from Alitalia and the finance ministry to ask for guarantees that the carrier could still meet financial obligations. "We are very concerned now as the only chance of a capital injection is fading away," Mr. Riggio told Bloomberg News, adding that ENAC can revoke Alitalia's license if it is in "permanent financial difficulty and has no clear prospects." Mr. Viggio commented to Bloomberg News that if Alitalia is placed into special administration, there would be repercussions on the local market, since the carrier controls about half of the Italian air transportation market. Mr. Viggio, however, warned, "If they don't convince us, we'll have to take action." As reported in the TCR-Europe on April 3, 2008, Alitalia S.p.A., labor unions, professional associations, and Air France-KLM SA stopped negotiations after failing to reach an agreement that would accomplish the sale's effectiveness conditions, satisfaction of which would finalize the acceptance by Alitalia and Italy of Air France's binding offer. Alitalia's board said it would review it financial options before deciding today, April 8, 2008, whether to continue its operations or to file for bankruptcy proceedings. Italian Finance Minister Tommaso Padoa-Schioppa said that if the sale to Air France fails, Alitalia may seek protection from creditors and the government would appoint a special commissioner to initiate bankruptcy proceedings. The government had pledged to grant Alitalia a EUR300 million bridging loan if Air France's takeover pushes through. Alitalia badly need more funds as it had less than EUR200 million in cash and credit available at March 31, 2008. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/ -- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. The Italian government owns 49.9% of Alitalia. The company has operations in Argentina and Japan. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. |
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