Board members to supply bailout of €500 million
The lifeline thrown to struggling Alitalia on Friday will not last long, experts say. The Italian government and the carrier’s board members, including Air France-KLM, agreed on a capital increase bailout of €500 million. Shareholders will vote on the capital increase today.
A major creditor, the energy company Eni, had threatened to cut fuel supplies this weekend but the bailout is keeping planes in the air at least for now. But Alitalia is said to be leaking around €10 million a day.
So the cash injection is seen as a temporary solution before talks start with Air France on a possible merger.
Italy’s equally struggling government pulled together €300 million in emergency funding – including €75 million from the state-owned postal service. Air France-KLM, currently in the middle of its own restructuring, is to provide another €75 million. Other shareholders will give €150 million.
Business leaders are sceptical. “If it’s an emergency band-aid to stop the bleeding, so be it,” Giorgio Squinzi, head of business lobby Confindustria, said. “But we’ll need to have a serious think about a plan in the medium and long term once and for all.”
And the specific position of Air France-KLM remains unclear. Italian media are quoting chief executive Alexandre de Juniac as saying that his group would not participate in a cash call, although Reuters reports that de Juniac denied making any statements on the capital increase.