Air France KLM 'wins battle for Alitalia stake'

Berlusconi 'gives go ahead for deal'

Air France KLM has reportedly won the battle with Lufthansa for a 25% stake in the re-launched Alitalia.

Italy's prime minister Silvio Berlusconi is said to have sanctioned the deal despite strong pressure from Milan politicians to favour the German airline.

One agency reported that the deal has already been done, subject to approval by the boards of AF-KLM and the newly re-constituted Alitalia.

Approval, the Bloomberg agency said, would be obtained at directors' meetings of the two companies tomorrow (January 9).

CAI, the 16-strong consortium which has bought Alitalia, said that Mr Berlusconi had come down on the side of the French-Dutch offer, despite earlier being in favour of Lufthansa.

Mr Berlusconi helped block a take over bid by AF-KLM last year because he said he wanted Alitalia to stay in Italian hands.

But CAI and its chairman Roberto Colaninno have favoured AF-KLM, believing that its concept of one major hub in Rome for the re-vamped Alitalia was the right solution.

The Lufthansa solution planned for hubs in both Milan and Rome and was favoured by the Milan-based Northern League.

Its leader Umberto Bossi, who is a member of Mr Berlusconi's coalition, has described the French-Dutch plan as "stupidity."

Under the alleged deal, AF-KLM will pay about €300m for a 25% stake in Alitalia.

Mr Colaninno wants the deal sealed by Janaury 13 when the new Alitalia is re-launched.

Under CAI's control, the carrier has cut both its network and staff and has also been merged with former rival Air One.

www.alitalia.com   www.airfrance.com   www.lufthansa.com