I found this online today. It seems to me that the Wings Alliance with AZ/CO/KL and NW will come to fruition after all!
KLM, Alitalia Talk on Resuming Alliance, People Say
Rome, Jan. 25 (Bloomberg) -- KLM Royal Dutch Airlines NV may resume a partnership with Alitalia SpA, four months after British Airways Plc dropped talks to buy the Dutch company, people familiar with the situation said.
Executives from KLM, Europe's fourth-largest carrier, and No. 6 Alitalia met earlier this month to discuss reviving their collaboration, the people said. KLM dropped its partnership with Alitalia nine months ago. The companies had an alliance which stopped just short of a merger and under which they aimed to share profit eventually.
The airlines, which combined would have 17 percent of the market in Europe, second only to BA's 21 percent, are seeking partners as competition increases. Their efforts to combine with bigger carriers have failed since their own alliance collapsed.
Their alliance was ``mutually convenient for both airlines and was a good solution'' to their requirements, said Gerald Khoo, an analyst at BNP Paribas. ``It was ambitious but not so ambitious it was too difficult to pull off'' with regulators.
KLM's efforts to merge with BA collapsed in September, while Alitalia has failed in talks to form a partnership with Air France or SAir's Swissair. Neither KLM nor Alitalia can survive alone as Europe's airline industry consolidates, analysts said.
Few alternatives matched the potential of the KLM-Alitalia alliance in which the KLM offered Alitalia the long-haul network it lacks while the Italian carrier gave KLM access to a big domestic market.
The European Union's approval of a new plan for Alitalia's Milan Malpensa hub could clear the way for the revival. KLM in April blamed problems with Malpensa and the slow pace of the Italian carrier's share sale for the split.
The EU last month approved Italy's fifth change to flight allocations between Milan's Malpensa and Linate airports, concluding a 15-month battle that had embroiled the government, the EU and a dozen European airlines. The carriers had complained previous allocation plans favored Alitalia.
Alitalia spokesman Enrico Lepri said ``alleged'' talks with KLM as well as an executive meeting are ``completely groundless'' as was a report in Italian daily newspaper Il Sole/24 Ore that Alitalia Chief Executive Domenico Cempella would resign at a January board meeting to facilitate the revival.
``We still see consolidation in Europe, operationally it has always made sense'' said KLM spokeswoman Laura Frost, who declined to comment on whether the officials have met and are weighing a renewed alliance.
Lack of Choices
The lack of alternative solutions to compete with BA, Deutsche Lufthansa AG and Air France, which are all building global alliances, could help bring KLM and Alitalia back together. Their breakup prompted Alitalia to sue KLM for damages and the Dutch carrier to countersue. The carriers are still in litigation.
When asked whether Alitalia is interested in resuming ties with KLM, Alitalia President Fausto Cereti said in an interview:
``If I want to marry a girl and she says `no,' I would be a fool to say she was worthless. I am still looking at the girl.'' Cereti declined to be more specific.
Even though KLM didn't blame Alitalia's management for last year's breakup, a new chief executive at the airline might make it easier for the Italian government, which owns 53 percent of the carrier, to resume talks, analysts said.
Italian daily La Repubblica reported in December that Cempella had lost the support of the government because of his criticism of the handling of the Malpensa issue.
Jan/25/2001 6:39 ET
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