Alitalia bidders take good with bad

Marketplace Staff Dec 7, 2007
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Alitalia bidders take good with bad

Marketplace Staff Dec 7, 2007
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TEXT OF INTERVIEW

Doug Krizner: A takeover of Italy’s troubled airline Alitalia took another step this morning. The second of two bids came in. Italian carrier Air One joins Air France KLM. But as Megan Williams reports from Rome, whoever wins, its likely to be a turbulent ride.


Doug Krizner: Alitalia isn’t exactly renowned for being a smooth operation. It’s got a bloated workforce of 20,000, a long history of bad management, and two costly hubs in Rome and Milan — all adding up to a million euro-a-day in losses.

But Italy’s also a top flight destination. And that’s what makes the airline appealing to Air France-KLM, which already owns 2 percent. If it wins the bid for a controlling stake, it says it would cut jobs, get rid of money-losing routes and ditch Milan as a hub.

Economic commentator Michele Pissani says northern Italy is already protesting that possibility.

This is a deal tailor-made for Air France, he says, because it would direct more flights to Paris instead of Milan. Air France-KLM says it’s counting on Alitalia staff to help with the changes if it wins the bid. But given how strike-prone that staff is, Air-France could be in for more than it bargained for.

In Rome, I’m Megan Williams for Marketplace.

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