Alitalia: Another financial disaster caused by Italian politics and management by the ?State??

In 2008 the Alitalia airline was close to be fully bought by Air France, but the deal was stopped by the strong opposition of Berlusconi in the name of the “italianity” of Alitalia. The company was delisted in 2009 and acquired by a group of Italian “entrepreneurs”, mostly linked with political parties including Roberto Colaninno (associated a few years ago with a Telecom Italia mess) and the Riva Group (the owner of Ilva, a company that poisoned the city of Taranto and is under legal investigation for environmental disaster).

The group was called at the time “the brave captains” by the leader of the opposition party Berlusconi. Actually the huge € 4 billion debt of Alitalia was split into a bad company, managed by a special commissioner paid by Alitalia bondholders and the Italian State…

Now that "the brave captains” proved once again their inability, Alitalia is still facing a risk bankruptcy. The best solution, in the opinion of ECGS Italian partner Frontis Governance, is that another airline takes control, even if it would pay a much lower price than paid in 2008. Air France-KLM currently holds 25% of Alitalia, but the Italian nationalism is not yet satisfied and many parties, including trade unions, ask for another State help. Yesterday the shareholders’ meeting approved a share capital increase of € 300 million, which should be completed within November 15th, but it is not clear yet who will subscribe it. At the moment, the State-owned Poste Italiane stated they will subscribe € 75 million, but British Airways complained with the European Commission to block State aids…The next steps will be worth watching.

                                                                                                                                                                                                                                                                                                       London, October 16, 2013

More about the case: Shareholders voting on AlItalia Bailout Plan