An Alitalia plane takes off from Fiumicino airport near Rome yesterday.
ROME: Italy’s government drew fire yesterday after stitching together an emergency bailout for Alitalia that critics said should involve less taxpayer money and more long-term strategy, while top shareholder Air France-KLM refused to commit to the plan.
Alitalia, which last turned a profit in 2002, needs to secure funding of ¤500m ($676m) by today or risk its planes being grounded. Creditor Eni has threatened to cut fuel supplies unless the airline can show it is a business “we expect to exist six months from now.”
After being turned down by several national companies, Rome finally found life-saving funding for Alitalia late on Thursday, persuading the state-owned post office to commit to providing ¤75m via a capital increase while the government provides another 75m in loans. But the emergency plan relies on existing shareholders giving another 150 million between them and the country’s banks stumping up ¤200m in new loans, sources close to the matter said.
By midday yesterday, according to other sources with knowledge of the proceedings, the government had secured ¤225m, with a consortium of banks — as yet unnamed — providing ¤150m alongside the post office’s commitment.
Business leaders said the state-funded plan lacked a clear strategy to make the airline a long-term viable business. “If it’s an emergency band-aid to stop the bleeding, so be it. But we’ll need to have a serious think about a plan in the medium and long term once and for all,” said Giorgio Squinzi, the head of business lobby Confindustria.
The bailout will be presented to Alitalia’s board yesterday afternoon. It is regarded as only a stop-gap until Air France-KLM, which owns 25 percent in Alitalia, can agree a deal with the airline’s other investors for it to double its stake.