Tuesday January 13, 12:51 PM
Flagship airline Alitalia takes off as private group
MILAN (AFP) - Italy's flagship carrier Alitalia (Milan: AZA.MI - news) took to the skies under private ownership on Tuesday, the day after sealing a partnership agreement with European giant Air France (Paris: FR0000031122 - news) -KLM.
The streamlined carrier, which has also merged with domestic rival Air One, had a turbulent start as protests by employees and airport workers caused 11 flight cancellations and about 25 delays, Italian news agencies reported.
But the protests were much smaller than feared thanks to 11th-hour accords on working conditions reached Monday night between management and the unions.
The national symbol, verging on bankruptcy, was taken over by a group of prominent Italian business leaders after a years-long quest by the Italian government to sell off its 49.9 percent stake.
The reborn Alitalia run by the Italian Air Company (CAI) retains the colours as well as the "Italianness" championed by Prime Minister Silvio Berlusconi.
Air France boss Jean Cyril Spinetta said in Paris on Tuesday that the deal under which the Franco-Dutch airline acquired a 25 percent stake was struck "with strict respect" for Alitalia's Italianness.
Nevertheless, Air France-KLM's stake, for which it paid 323 million euros (432 million dollars), is the largest, and the deal is seen as a victory for the Franco-Dutch airline over German arch-rival Lufthansa (Xetra: 823212 - news) .
French daily Le Figaro said in an editorial that Spinetta had "snatched a new trophy in beating out" Lufthansa.
Together, the new Alitalia and Air France-KLM will fly between 90 million and 100 million passengers a year.
CAI's investors put up 1.052 billion euros to acquire Alitalia's passenger operations, and another 300 million for Air One, whose managing director Carlo Toto reinvested 60 million euros in the new company.
While Air France's stake is the largest, it will have only three of the 19 seats on the relaunched airline's board of directors, and two of the nine seats on the executive council.
Lufthansa, which is expanding on several other fronts, wanted more than 25 percent of the company, CAI managing director Rocco Sabelli said in an interview published Tuesday.
The German airline never made a formal offer and had asked for "revenues from joint operations to be paid into a common fund, a sort of hidden merger," he told the Italian daily La Stampa.
The streamlined company has some 12,000 employees after shedding more than 3,000 jobs.
Its fleet of 148 planes will fly 670 routes a day, down more than a third from the 1,050 routes flown by Alitalia and Air One each day a year ago.
Thirteen of the intercontinental flights now originate in Rome, while Malpensa airport retains just three.
Leading shareholders in the new Alitalia include the Benetton Group, head of Italy's employers association Emma Marcegaglia, Pirelli (Milan: PC.MI - news) tyre group president Marco Tronchetti Provera, and banking giant Intesa Sanpaolo (Milan: ISP.MI - news) .
Activities including cargo and maintenance have been sold to help pay off the old company's debts estimated at three billion dollars.
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