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Air France Buys 25 Percent Of Alitalia  
User currently offlineCF105Arrow From Canada, joined Oct 2007, 319 posts, RR: 0
Posted (5 years 3 months 1 week 6 days 19 hours ago) and read 7359 times:

Air France-KLM Group negotiators reached an agreement to buy 25 percent of Alitalia SpA, beating out rival bidder Deutsche Lufthansa AG, three people with knowledge of the matter said.

The proposal must still be approved by the companies' boards, the people said. Air France has agreed to pay slightly more than 300 million euros ($411 million) for the stake in Rome-based Alitalia, according to one of the people.

http://www.bloomberg.com/apps/news?p...1085&sid=arooU0kU3jtQ&refer=europe

Although expected this ends any talks about Lufhansa's possible participation in Alitalia. I personally am very glad that LH is lucky to have been been left out. Unless Berlusconi tries to reverse things again.

Cheers,

Sam

[Edited 2009-01-07 11:05:27]

36 replies: All unread, showing first 25:
 
User currently offlineSflaflight From United States of America, joined Nov 2005, 1183 posts, RR: 1
Reply 1, posted (5 years 3 months 1 week 6 days 19 hours ago) and read 7318 times:



Quoting CF105Arrow (Thread starter):
Although expected this ends any talks about Lufhansa's possible participation in Alitalia. I personally am very glad that LH is lucky to have been been left out

Yup, finally LH can keep on course with developing LH Italy at MXP and let Rome keep its beloved AZ and all the crap that will come with it. Personally, this AFKL-AZ tie up is the best thing for northern Italian premium passengers!

Quoting CF105Arrow (Thread starter):
Unless Berlusconi tries to reverse things again.

...and he might, but people are becoming extremely tired with his retoric!


User currently offlineAFKL From Netherlands, joined Feb 2008, 219 posts, RR: 0
Reply 2, posted (5 years 3 months 1 week 6 days 18 hours ago) and read 7147 times:

Good for AF-KLM. I dare say, things can only turn for the better.

I suppose they're getting a far better deal than before, with far less "strings attached". Can't wait to see what Alitalia will bring in the coming years, and I must say that I'm glad Alitalia was able to keep it's name. I have always been one of the "let them die" supporters, but keeping this historic name is great (although I suppose from a marketing point of view a lot must be done to reestablish the Alitalia brand).

I wish them luck, especially to the employees!


ALLARD.



ALLARD. First flight: KLM DC-10, LLW - AMS.
User currently offlineNightFlier From United States of America, joined May 2004, 284 posts, RR: 2
Reply 3, posted (5 years 3 months 1 week 6 days 11 hours ago) and read 6714 times:

WOW AF is buying parts of everyone. So AZ will be keeping their name ? Will AZ aircraft have the same markings like KLM aircraft on the side ?


Airplanes are only as good as the people who fly&fix them.
User currently offlineOsiris30 From Barbados, joined Sep 2006, 3186 posts, RR: 26
Reply 4, posted (5 years 3 months 1 week 6 days 10 hours ago) and read 6666 times:

Someone please explain to me how owning 1/4 of a complete nightmare (which gives you NO say in what happens) is a good thing???


I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineBreaker1011 From United States of America, joined Nov 2007, 938 posts, RR: 2
Reply 5, posted (5 years 3 months 1 week 6 days 10 hours ago) and read 6623 times:

And once again, British Airways remains politely standing in the hot salted pretzel line while it's competitors gain more and more ground on the playing field against it. LH and AF/KL are going to make BA feel pain for years to come if it doesn't get off it's feet. Both are already whipping the pants off BA in terms of premium traffic and overall scope within Europe.

I'm beginning to think that BA's recent cry on a potential OW breakup may indeed be legit and not just an idle threat - if ATI fails to get approval, break off from AA and try to find a partner elsewhere that will give it the same benefits being reaped by LH and AF.



Life's tough. It's even tougher if you're stupid. J. Wayne
User currently offlineBreaker1011 From United States of America, joined Nov 2007, 938 posts, RR: 2
Reply 6, posted (5 years 3 months 1 week 6 days 10 hours ago) and read 6602 times:



Quoting Osiris30 (Reply 4):
Someone please explain to me how owning 1/4 of a complete nightmare (which gives you NO say in what happens) is a good thing???

It doesn't give you controlling interest, but it certainly give you a "say" in business activities. AF has demonstrated tremendous finesse with KL under it's belt, I'm sure they'd not have made such an investment if they didn't think it would eventually behoove them to do do. It does one thing for sure - forces LH to spend it's own resources to further develop it's presence in MXP instead of just absorbing it, keeping them occupied for a bit longer.



Life's tough. It's even tougher if you're stupid. J. Wayne
User currently offlineOsiris30 From Barbados, joined Sep 2006, 3186 posts, RR: 26
Reply 7, posted (5 years 3 months 1 week 6 days 9 hours ago) and read 6533 times:



Quoting Breaker1011 (Reply 6):
It doesn't give you controlling interest, but it certainly give you a "say" in business activities. AF has demonstrated tremendous finesse with KL under it's belt, I'm sure they'd not have made such an investment if they didn't think it would eventually behoove them to do do. It does one thing for sure - forces LH to spend it's own resources to further develop it's presence in MXP instead of just absorbing it, keeping them occupied for a bit longer.

I'd agree with you, if it's wasn't Alitalia we were talking about. I'm not so sure LH isn't better off going it alone. KLM was never the mess AZ *appears* to have become so their experience in that endeavor may not be directly applicable.

Frankly, I can't see why *anyone* would touch AZ with an infinitely long pole.



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineJoFMO From Germany, joined Jul 2004, 2211 posts, RR: 0
Reply 8, posted (5 years 3 months 1 week 6 days 8 hours ago) and read 6459 times:



Quoting Osiris30 (Reply 7):
Frankly, I can't see why *anyone* would touch AZ with an infinitely long pole.

I tend to think the same. BVut when you consider that with AF and LH two of the finest and best maneged airlines in the world are both very much interested in the AZ, there must be some value in it....


User currently offlineLufthansa411 From Germany, joined Jan 2008, 692 posts, RR: 1
Reply 9, posted (5 years 3 months 1 week 6 days 8 hours ago) and read 6408 times:



Quoting JoFMO (Reply 8):
BVut when you consider that with AF and LH two of the finest and best maneged airlines in the world are both very much interested in the AZ, there must be some value in it....

I don' t think it is value in the airline so much as it is value in the potential passengers that the current airline allows access to. I have a feeling if either one could, they could scrap the AZ brand altogether and instead either take over Italian hubs with their own carriers, or do what Lufthansa is doing and set up LH Italia.

We will see which turns out to be the better investment though- LH Italia or (so far) 25% of Alitalia



Nothing in life is to be feared; it is only to be understood.
User currently offlineOsiris30 From Barbados, joined Sep 2006, 3186 posts, RR: 26
Reply 10, posted (5 years 3 months 1 week 6 days 8 hours ago) and read 6398 times:



Quoting JoFMO (Reply 8):
I tend to think the same. BVut when you consider that with AF and LH two of the finest and best maneged airlines in the world are both very much interested in the AZ, there must be some value in it....

That same thought has crossed my mind, but then I'm am reminded of decisions like the:

Ford Edsel
Any number of Pan Am blunders
Decca Records not signing the Beatles
Western Union shooting down Bell re the Phone
and Digital Research telling IBM to stuff it

In short, lots of established well run companies have made horrendous mistakes in the past. I can't help but wonder if AF and LH are underestimating the scope of the *real* problems at AZ (which as I have *heard* are corruption and labor issues).

Now, I'm very much admittedly not 'on the ground' as it relates to the situation, but somehow I think LH gets the better deal by 'losing' this. Heck for all we know LH's interest was solely to drive the price that AF might pay up. AZ seems culturally the worst possible fit on the planet for LH.



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8492 posts, RR: 14
Reply 11, posted (5 years 3 months 1 week 6 days 7 hours ago) and read 6351 times:
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Congratulations LH !

I think that LH shareholders and employees must be very relieved - far better to start over from scratch with LH Italia and be in a good position to dominate the market in a couple of years time when the "new" AZ inevitably collapses as the old one should have done many years ago



Moderation in all things ... including moderation ;-)
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 12, posted (5 years 3 months 1 week 6 days 7 hours ago) and read 6317 times:

A great day for LH!

I would not buy 25% of AZ for 300K euro (unless I expected liquidation soon). 300M euro seems absurd to me.


User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8492 posts, RR: 14
Reply 13, posted (5 years 3 months 1 week 6 days 7 hours ago) and read 6307 times:
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will the board of AF/KL have to get approval from their own shareholders for this move? If so , I would think that they are likely to meet with some measure of opposition


Moderation in all things ... including moderation ;-)
User currently offlineLukasVIE From Austria, joined Jan 2009, 23 posts, RR: 0
Reply 14, posted (5 years 3 months 1 week 6 days 6 hours ago) and read 6246 times:



Quoting Kiwiandrew (Reply 13):
I would not buy 25% of AZ for 300K euro (unless I expected liquidation soon). 300M euro seems absurd to me.

Well, I do not think that AZ (at the moment) has enough assets to pay its debts, much less so to produce liquidation proceeds for the stake-holders!


User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8492 posts, RR: 14
Reply 15, posted (5 years 3 months 1 week 6 days 6 hours ago) and read 6235 times:
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Quoting LukasVIE (Reply 14):


Quoting Kiwiandrew (Reply 13):
I would not buy 25% of AZ for 300K euro (unless I expected liquidation soon). 300M euro seems absurd to me.

Well, I do not think that AZ (at the moment) has enough assets to pay its debts, much less so to produce liquidation proceeds for the stake-holders!

I did not make the post that you have attributed to me - that was actually Zvezdas post



Moderation in all things ... including moderation ;-)
User currently offlineFlyingAY From Finland, joined Jun 2007, 697 posts, RR: 0
Reply 16, posted (5 years 3 months 1 week 6 days 6 hours ago) and read 6155 times:

Are they actually buying 25% of current AZ with all the debts, the new AZ without the debts or CAI? I think some people here think they're buying the old AZ with all the debts, but I think the article points that they're buying 25% of the new AZ with AP included and no debts or most unprofitable assets:

Quote:
The new airline will combine Air France-KLM’s Italian operations with Alitalia and Air One SpA, the country’s second- biggest carrier. Air One was merged with its larger domestic rival last month in CAI’s government-backed rescue, which also offloaded Alitalia’s least-profitable assets along with most of its debt and almost half the workforce.



User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8492 posts, RR: 14
Reply 17, posted (5 years 3 months 1 week 6 days 6 hours ago) and read 6130 times:
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Quoting FlyingAY (Reply 16):
Are they actually buying 25% of current AZ with all the debts, the new AZ without the debts or CAI? I think some people here think they're buying the old AZ with all the debts, but I think the article points that they're buying 25% of the new AZ with AP included and no debts or most unprofitable assets:

I know that they do not get the debts , but they are going to inherit a large part of AZs biggest liability - the people - it is hard to see how they could expect to make a success of this if they take on any significant number of the old AZ staff



Moderation in all things ... including moderation ;-)
User currently offlineGisors From France, joined Apr 2008, 46 posts, RR: 0
Reply 18, posted (5 years 3 months 1 week 6 days 5 hours ago) and read 6067 times:



Quoting Kiwiandrew (Reply 17):
I know that they do not get the debts , but they are going to inherit a large part of AZs biggest liability - the people - it is hard to see how they could expect to make a success of this if they take on any significant number of the old AZ staff

365 days ago AF-KL were ready to invest right away 1 bln € to revamp AZ while taking nearly 2 bln in debt and various liabilities. They should thank the Italian unions and Berlusconi for preventing them to commit that blunder.

Now they are going to run AZ *and* AirOne for only one tenth of the previous price, while Italian taxpayers are kindly requested to take care of the debt (and after Italian authorities have already cut more redundancy jobs than AF thought it would ever be possible). That doesn't sound like a bad deal to me.

And now the challenge is to reestablish a legacy brand like Alitalia's while running the company like en enlarged AP. That doesn't seem out of reach IMHO.


User currently offlineLarSPL From Netherlands, joined Apr 2002, 473 posts, RR: 0
Reply 19, posted (5 years 3 months 1 week 6 days 4 hours ago) and read 5898 times:

how many slots does AZ hold at LHR and how much are those worth?


facebook.com/ddaclassicairlines
User currently offlineMillwallSean From Singapore, joined Apr 2008, 1217 posts, RR: 6
Reply 20, posted (5 years 3 months 1 week 6 days 4 hours ago) and read 5898 times:



Quoting Gisors (Reply 18):
365 days ago AF-KL were ready to invest right away 1 bln € to revamp AZ while taking nearly 2 bln in debt and various liabilities. They should thank the Italian unions and Berlusconi for preventing them to commit that blunder.

Italian negotiations. Now Alitalia has a fighting chance. The version Air France was prepared to take over was in a lot worse shape.
the Italian taxpayer is of course screwed but thats not the first time...



No One Likes Us - We Dont Care.
User currently offlineJoost From Netherlands, joined exactly 9 years ago today! , 3153 posts, RR: 4
Reply 21, posted (5 years 3 months 1 week 6 days 4 hours ago) and read 5851 times:



Quoting LarSPL (Reply 19):
how many slots does AZ hold at LHR and how much are those worth?

10, 5 for LIN and 5 for FCO. I can't say anything about the value, although they are defenitely cheaper than they were a year ago thanks to the economic downturn.

Way more interesting is the combined stronghold at LIN.


User currently offlineBrightCedars From Belgium, joined Nov 2004, 1286 posts, RR: 2
Reply 22, posted (5 years 3 months 1 week 5 days 23 hours ago) and read 5130 times:

I'm glad for LH that they are not taking that one onboad, it will give them time to focus on its acquisitions of SN, OS and BD and that's already a lot of work. But in no way anything as bad and demanding that AZ would have been.

I hope the best for AFKL but frankly I'd just put those 300M€ in the trash if I was an accoutant out there, and fear how much more those 25% will turn out to cost in the end.



I want the European Union flag on airliners.net!
User currently offlineBurkhard From Germany, joined Nov 2006, 4360 posts, RR: 2
Reply 23, posted (5 years 3 months 1 week 5 days 22 hours ago) and read 4827 times:

I wish AF/KL all the best. To turn around AZ would be a miracle, but these happen in Italy every day...

User currently offlineKLMflyer From United States of America, joined Feb 2004, 156 posts, RR: 0
Reply 24, posted (5 years 3 months 1 week 5 days 22 hours ago) and read 4759 times:

well, first of all I need to clarify that LH has never offered an official offer or bid for purchasing any amount of the new AZ.
The italian media, the Italian political system and the Italian public opinion did their best to try to beg for LH to become a partner and run the new AZ, but beyond the "good intention" this begging lasted for almost 10 months without any offical reply from LH, and only yesterday the Italian government was forced to admint that LH never offered any proposal nor shown any interest for AZ.

AF-KL is definitely the best partner for the new AZ but I do hope they managed to agree a sort of plan B with the pool of 16 italian enterprenueus who hold the 75% of the company (= 4.6875% per shareholder, hence AF-KL is the #1 shareholder with its 25% stake) so that within the coming 5 years they can increase their share by acquiring the stakes of those Italian enterpreneurs who will leave the company, and some are already planning to do so in the short term.


25 Post contains links Janmnastami : This is not exact. LH has said that they have never made an official offer, but it's not true that they weren't interested in the new AZ: Mayrhuber h
26 GBan : I think you are both right. Yes, they never did bid for AZ. But of course LH was very interested in AZ, apparently more in the form of a *A partnersh
27 DELTA7478 : Well I guess Alitalia will still be part of SkyTeam then. SkyTeam need to keep their numbers up to compete with Star.
28 797 : Absolutely. As a matter of fact, AF-KL won the deal because the costs any other competitor would have had to encounter for AZ to leave the SkyTeam al
29 R2rho : Wow, this must be the first airline bid in Europe that LH has NOT won! Good news for both AF-KL and LH. LH stays out of the AZ mess but is free to dev
30 JoFMO : What will happen with Air One's frequent flyers? So far Air One is a fully participating member of LH's Miles&More. I would assume that they can't tra
31 WAC : People forget that the new AZ was looking for an "industrial partner" i.e. someone that has good management skills and experience and IMHO AF has a sl
32 Kiwiandrew : not necessarily - it could have been declared that the Skyteam membership belonged to the 'bad' AZ rather than to the 'good' AZ - in that case the le
33 Burkhard : That is what I expect not to happen. LH and AF will not start a war about Italy. LH takes MXP, AF takes FCO, and the friendly competition continues.
34 LarSPL : Thats is exactly what i expect to happen,.. AFKL wants Italy because the north Italian region is that 1 region in Europe where the highest percentage
35 Post contains links CF105Arrow : Here we go again: Deutsche Lufthansa AG “still has time” to make an offer for a partnership with Alitalia SpA, Corriere della Sera reported, citi
36 Gisors : ... and possibly this will provide an excuse for the final decision to be delayed once more! Of course LH never had any intention to take over AZ and
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