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Last Updated: Wednesday, 17 January 2007, 15:56 GMT
Air France boss leaves Alitalia
Alitalia plane
Alitalia has not made a profit since 2002
The boss of Air France-KLM has resigned from the board of Alitalia, increasing speculation that the French airline may bid for the up-for-sale Italian firm.

Air France-KLM said Jean-Cyril Spinetta had left the Alitalia board due to the current bidding process for Alitalia launched by the Italian government.

The government wants to sell at least 30.1% of Alitalia, which would force the buyer to launch a full offer.

Air France-KLM currently owns a 2% stake in loss-making Alitalia.

The Italian government has a 49.9% stake in the carrier.

'Offer now close'

Air France-KLM has long been considered the main potential buyer for Alitalia, but it has repeatedly said it would not be interested until the Italian carrier turns around its finances.

Jean-Cyril Spinetta
Mr Spinetta may soon launch a formal bid for Alitalia

Alitalia, which has suffered from frequent strikes and over-staffing, has not made an annual profit since 2002.

Struggling against high costs, it has lost out to low-cost rivals.

"The market views Spinetta's exit positively as it believes an offer is now closer," said one Milan-based trader.

The Italian government has set a deadline of 29 January to find a buyer for Alitalia, but has also set a number of conditions for interested parties.

Rome has cautioned that bidders must safeguard Alitalia's "national identity", saying the airline must maintain its main routes, and warning against large scale redundancies among the airline's current 18,000-strong workforce.

However, Italian Prime Minister Romano Prodi said last week that the Italian government would not block any move by Air France-KLM as long as it maintained the bulk of Alitalia's flights.

Other bidders said to be considering a possible move for Alitalia are Italian private equity firm Management & Capitali, and investment bank Rothschild.


SEE ALSO
January deadline for Alitalia bid
29 Dec 06 |  Business
Italy to reduce stake in Alitalia
01 Dec 06 |  Business
Leaders discuss Alitalia future
23 Nov 06 |  Business
Fresh losses at troubled Alitalia
13 Nov 06 |  Business

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