Rescue alla Italiana

28 August 2008 By Rachel Sanderson

Berlusconi has kept his promise to find an allItalian solution for Alitalia, although the Italian airline will probably end up with a European partner. The new plan may enrich some businessmen investors, but won’t calm fears that politics guide corporate dealings.

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The Italian government is set to approve a decree allowing the breakup of Alitalia, the national airline. The decree suspends antitrust laws and allows the carrier to sell assets through private talks while operating under bankruptcy proceedings, according to people familiar with the matter.

Robert Colannino, an Italian entrepreneur, is one of 16 investors who have agreed to invest up to E1bn to buy Alitalia assets including planes, routes, slots and the brand name. Those assets will bought by a new investment vehicle Compagnia Aerea Italiana. Air One, an Italian rival, will be folded into the new vehicle.

The new airline will have a more than 60% share of the Italian airline market.

Alitalia has not registered a profit since 1999. It is currently losing more than E2m a day.

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