Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : AKH...the NEW Air France/KLM -- Ignore unavailable to you. Want to Upgrade?

To: Skywatcher who wrote (67)	12/7/2007 3:00:13 PM
From: Skywatcher	Read Replies (1) \| Respond to of 72

Ryanair Tries To Trip Up Air France Bid For Alitalia LONDON - Not everyone's happy about the bidding war for Italian airline Alitalia. On Thursday, Ryanair, Europe's largest low-fare airline, turned up the pressure on the European Commission to block Air France-KLM's bid for Alitalia until both airlines have paid back 2.7 billion euros ($3.94 billion) in illegal aid from the French and Italian governments. Ryanair filed two separate complaints with the European Commission two years ago about 1 billion euros ($1.46 billion) in illegal state aid given to Air France in the form of discounted domestic passenger charges and 1.7 billion euros ($2.48 billion) in illegal state aid given to Alitalia in the form of debt write-offs, the company said. Ryanair's head of regulatory affairs, Jim Callaghan claimed discrimination. "The European Commission's failure to address these serious state aid complaints shows that it has one set of rules for high-fare flag carrier airlines and another for efficient low-fare airlines like Ryanair." Thursday's bidding deadline for struggling Italian airline Alitalia contained another unexpected last-minute surprise, as Air France-KLM expressed its interest publicly with a proposal to "win back the Italian market." It is the only major international carrier so far in the running, and investors in both airlines reacted positively to the news. The bidding process has so far only attracted one other viable party: AP Holding, the parent company of Italian airline Air One. A volley of rumors over the past few months has named Aeroflot (other-otc: AERUF - news - people ), Lufthansa (other-otc: DLAKY - news - people ) and Emirates Airline as possible bidders, but only Air France-KLM (nyse: AKH - news - people ) expressed its interest publicly on Thursday. Shares in Alitalia closed up 2 euro cents (3 cents), or 3.0%, to 87 euro cents ($1.28), in Milan. The long-running takeover saga had seen the stock flatten last month as frustrated investors suffered from speculation overdose. (See "Another Day, Another Rumored Alitalia Buyout") Shares in Air France-KLM finished up 55 euro cents (80 cents), or 2.4%, to 23.81 euros ($35.28), in Paris. They had initially fallen 1.9%, to 22.82 euros ($33.38), but press reports revealing Lufthansa would not make an offer for Alitalia boosted hopes that a deal would be on Air France's terms. A consortium of Italian investors led by Antonio Baldassare also re-iterated its interest in acquiring Alitalia on Thursday, but the airline rejected the bid last month because it failed to meet its requirements. "The purpose of this project is first for Alitalia (other-otc: ALAIF - news - people ) to win back the Italian market," said Air France-KLM, "thanks in particular to the profitable development of its network, to the reputation of its brand and to the assertion of its Italian identity." "It essentially means there is only one bidder left," said Nick van den Brul, analyst with Exane BNP Paribas. Although Air One has the backing of Sanpaolo Intesa (other-otc: INSPY - news - people ) bank, it is small-fry compared with either Air France-KLM or even Alitalia. According to van den Brul, Air France's aim would be to invest in the unprofitable Italian airline's turnaround rather than offer a straight purchase price. He said Alitalia needed to prove its worth by first restructuring its fleet and improving efficiency, and that any assistance from Air France would be dependent on future performance. Alitalia said it would reveal the names of all interested bidders at the end of Thursday.