Alitalia Auctioned Off To The Highest Bidder (Enough Funds To Keep Operating 2 – 3 Weeks)

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The other day Sebastian wrote (access here) about the state of the Alitalia after the unions had voted down the latest restructuring plan.

Alitalia Running Out Of Cash

Now, the Italian minister has made it crystal clear that the airline won’t be bailed out on government’s money. The airline will be sold to the highest bidder and the government will only provide a bridge loan to keep the airline float for the next few months.

Here’s an excerpt from Deutsche Welle (access the article here):

Italy’s transport minister Graziano Delrio said on Wednesday that Alitalia would be sold to the highest bidder, noting that Germany’s biggest airline, Lufthansa, was especially invited to make an offer for the airline.

Alitalia has been bailed out by Italy and private investors repeatedly over the years but Italy’s industry minister ruled out nationalization and public funds for the carrier.

After a board meeting on Tuesday, the airline said it would “start preparing the procedures provided by law,” including shareholder approval to request the appointment of a special administrator.

In another interview, industry minister Carlo Calenda – who brokered negotiations on the rejected rescue plan – said the government would only be prepared to offer Alitalia a six-month bridging loan worth between 300 and 400 million euros.

Conclusion

Who would like to buy this airline (even free?) that was profitable last time almost two decades ago  back in 1999? I guess that it would be expensive lesson for billionaire wishing to become millionaire to take over Alitalia.

The airline has been bailed out and/or restructured numerous time over the past two decades. I guess that someone should finally make the decision and pull the plug.

Cannot see any airline to bid for Alitalia unless they can have completely fresh start without any old baggage such as union contracts or airplane leases. What would Lufthansa gain from this takeover?

These financial and recent strike issues must have an effect on forward looking bookings. Why would you book a ticket on an airline that may not be around in six months time?

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