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Berlusconi: Italy in talks with foreign company to save Alitalia (updated)
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by rahul | August 7, 2008 at 09:24 pm
318 views | 2 Recommendations | 3 comments
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Italian economy shrinking again
The Italian economy has suffered its second quarter of negative growth in the past nine months, raising the prospect of it going into recession.
Output shrank 0.3% in the second quarter, the weakest three-month performance for nearly five years, according to official figures. But Italy is not yet officially in recession as this requires there to be two consecutive negative quarters. Its economy grew 0.5% in the first quarter of 2008
ROME (AFP) - Italian Prime Minister Silvio Berlusconi said Thursday talks were being held with a "large foreign company" about forming an alliance with Alitalia to save the cash-strapped national airline from bankruptcy. "We're aiming for Italy to have a profit-making national carrier," Berlusconi told national news channel TG1."We have a plan, we have the shareholders, we have the necessary funds, we're talking to a large foreign company to form an alliance that would make a difference internationally," he said. The Italian government said late last month it had pulled together enough funds to rescue the airline, which has been surviving on a loan of 300 million euros (471 million dollars) made in late April from public funds after talks for an Air France-KLM takeover collapsed. State-controlled Alitalia employs 11,100 people in airline transportation while 8,300 work in maintenance for AZ Servizi, controlled by a public holding company. It recorded pre-tax losses of 215 million euros in the first quarter of this year.
Most RecentMost Recommended Comments (3)
at 21:51 on August 7th, 2008
Thanks Rahul, Airlines companies all over the world seems having problems. Even low cost airlines in India are struggling to keep afloat.
at 04:20 on August 8th, 2008
Sanjay Jha, As I am no expert on India there is little to add on any actual merging plans with foreign airlines: I have only learnt of a rather nationalistic stand on privatisations and smart responses to keep operating at low costs. Unlike the Italian case, both government run and private airlines have only tried a domestic merge or consolidation among themselves with no foreign participation. In addition and just few months ago, Indian airline executives met India’s Prime Minister to ask for a better working environment amid growing fuel prices. On the side of demand, prospects are not bad at all. Unlike Italy, "India’s passenger traffic grew 18 per cent to 86.8m in the year ended March 2007, according to the country’s civil aviation ministry". According to Financial Times, "a consortium led by GMR, an Indian construction company, and Germany's Fraport, will revamp New Delhi airport..A similar deal was signed for Mumbai airport, which will be overhauled by GVK, another Indian construction company, and its partner, Airports Company South Africa." Thus, foreign participation in the Indian Aviation Industry seems to lag on the side of profit rather than bankruptcy survival. Were you to have any other enriching comment to make to this story, please do not hesitate to add it promptly.
at 23:54 on August 7th, 2008
rahul, I like this story. "saving Alitalia airline Berlusconi", you know what means the shortform ALITALIA....Always Late In Take Off, Italy saved in a artist strategy it's car manufacturer FIAT from bankruptcy; now they are in good shape with demand for small fuel efficient cars. Alitali may have the only chance to cooperate with Emirates, if they like Italian style I am not sure. As Sanjay says all airlines have trouble, the Emirates can sponsor the Kerosine for their airline, competitive advantage, you have to have the oil field with the airline.