Loss-making Italian airline Alitalia faces bankruptcy

Thursday, October 10, 2013

Reports of payment problems have been following Italian airline Alitalia for years. These problems should have ended with the privatization of the company and the entry of Air France-KLM nearly five years ago - and yet the airline now faces financial problems yet again.


Energy group ENI announced that from Saturday on they will discontinue delivering kerosene to the airline. The reason: due to the airline's financial problems, Alitalia is unable to pay its fuel bills.

According to information from the Reuters news agency, the ailing airline would needs a capital injection of 300 million euros. In addition, a credit line of 200 million euros is needed, claims the employee representatives of the company. Without a capital injection, Alitalia will cease to operate within the next few days.

The saviors Air France & KLM?

Government and shareholders hope and rely on a rescue by Air France-KLM. The Franco-Dutch company already holds 25 percent of Alitalia's stake and could increase their share - or take over the Italians completely. However, there are a few critical points in the conditions. CEO of Air France-KLM Alexandre de Juniac indicated having an interest in the airline, but at the same time spoke of "stringent conditions".

But the former airline's employees fear these new conditions. There's a significant chance that thousands of jobs will be lost. Moreover, Rome's Fiumicino Airport could be degraded by the Air France-KLM Group to number three after Paris and Amsterdam. The Italians also fear losing important routes to the partner airlines.

Alitalia has suffered a loss of ​more than one billion euros loss, and has added to that another billion euros in debt.

Written by: Team Flight-Delayed.com