dal Financial Times
Rivals lobby against state aid to Alitalia
By Kevin Done, Aerospace Correspondent
Published: March 23 2004 19:29 | Last Updated: March 23 2004 19:29
British Airways has launched a campaign to ensure that Alitalia, the majority state-owned Italian airline, does not receive more state aid to help it cope with its financial crisis.
Rod Eddington, BA chief executive, has written to Alistair Darling, UK transport secretary, to express "great concern" at the prospect of Alitalia receiving further state funding.
The move is expected to be followed shortly by a similar joint approach by several European airlines including BA and Lufthansa to Loyola de Palacio, the European transport commissioner, to try to pre-empt the possibility of aid being paid.
Alitalia, which is 62 per cent owned by the Italian state, has made an operating profit only once in the past 11 years and is struggling to compete against budget airlines as well as its bigger international rivals.
The Italian government failed last month to support the airline's latest restructuring plan in the face of serious labour unrest, which led to the resignation four weeks ago of Francesco Mengozzi, the previous chief executive.
He was replaced by Marco Zanichelli, a senior Alitalia board member, in a move orchestrated by Silvio Berlusconi, Italy's prime minister.
The airline has forecast an operating loss of €400m ($495m) for last year and has asked to delay the approval of its full-year accounts because changes to the industrial plan could affect the results.
In his letter to Mr Darling, Mr Eddington said that it appeared that the new chief executive would "drop the previous plan and attempt to turn the company around in a more politically acceptable way.
"I believe this can only imply additional state funding. He has already said publicly that the evidently necessary downsizing and job losses will not take place."
BA has recently completed axing 13,000 jobs or 23 per cent of its mainline workforce as part of its own restructuring.
Mr Eddington said government aid continued to be a "major industry problem with huge sums of money provided by the US government to its airlines".
He warned that it would be unfortunate if the European Commission were to weaken its policy to allow any further aid to Alitalia, which would have a significant impact on BA and on other UK airlines in particular given the Italian carrier's growing alliance with Air France and KLM.
The French and Dutch carriers are hoping to complete their own merger plans next month.
Mr Eddington said the UK should take the initiative to ensure that aid for Alitalia was not forthcoming.
"Action is necessary now to prevent it, since once it is paid, experience shows that the damage is done whether or not it is eventually repaid."
The last time Alitalia was bailed out by the Italian government in 1997, one condition was that Rome undertook "not to grant Alitalia any further capital payment or any other aid in any form, including loan guarantees".
Other carriers that had recevied aid in the 1990s such as Aer Lingus and Iberia had shown that it was possible for airlines to manage themselves through difficult times without recourse to more aid, said Mr Eddington.
He added: "Alitalia must be made to work to the same market disciplines."




Rispondi Citando
