UPDATE 1-Alitalia rescue hopes boosted as Lufthansa looks set to step in


Reuters | Rome | Updated: 17-10-2019 18:09 IST | Created: 17-10-2019 18:03 IST
UPDATE 1-Alitalia rescue hopes boosted as Lufthansa looks set to step in
Image Credit: Flickr
  • Country:
  • Italy

Alitalia's rescue hopes received a boost on Thursday with signs that Lufthansa could take a stake in the Italian carrier and Rome agreeing to a 350 million euro ($389 million) bridging loan to ease immediate cash worries. Loss-making Alitalia has been run by special administrators since May 2017 and talks led by state-owned railway group Ferrovie Dello Stato to put together a consortium of rescuers that have been going on for a year without coming close to a deal.

Until now Ferrovie has been negotiating with U.S. carrier Delta Air Lines and infrastructure group Atlantia, but the three potential partners have been divided into key aspects of the rescue plan including the size of their respective investments. On Thursday, two people with knowledge of the matter said Germany's Lufthansa was now offering not only a commercial partnership but could also take a stake in the Italian rival.

Lufthansa would be open to making the investment if conditions, mainly regarding restructuring measures it deems necessary at its Italian rival, were met, one of the sources said. Lufthansa declined to comment. With Alitalia burning through its cash reserves and down to just 310 million euros by the end of September, the carrier urgently needs new investors and a fresh business plan that will enable it to prepare for next year's peak summer season.

To give Alitalia more time to negotiate a rescue deal, Rome is expected to postpone an Oct. 15 deadline for Ferrovie to present a binding bid for Alitalia, two sources said. Rome will give the carrier a new bridge loan of 350 million euros, a draft decree seen by Reuters showed.

An Italian source said the size of Lufthansa's potential investment was still unclear and added that the German carrier had expressed its preference for a solution that would give private shareholders majority ownership in Alitalia. An involvement of Lufthansa would close the door to Delta, which has expressed commitment for putting only around 100 million euros in the rescue of Alitalia, unnerving Rome.

The Italian government would welcome the German carrier taking a stake in Alitalia, a government source said. Italy's Il Messaggero newspaper earlier reported that a senior Lufthansa executive said the company was ready to acquire a stake in the Italian airline.

Also Read: UPDATE 2-Lufthansa cabin crew union calls for Sunday strike in Frankfurt, Munich

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback