Alitalia needs urgent capital injection
Alitalia SpA, Italy's state- controlled airline, said it needs capital "in a very short time" after talks to merge with Air France-KLM Group failed and it reported a fifth straight annual loss.
Alitalia had a net loss of 494.7 million euros after oil prices surged, it said last night. Sales fell 4.3 percent to 954 million euros, hurt by a 10 percent drop in traffic as the Rome-based airline cut unprofitable routes and its worsening finances discouraged passengers.
Italy last month granted Alitalia a 300 million-euro loan to prevent the company from running out of cash before new Prime Minister Silvio Berlusconi could find a buyer. New bids are being sought after Air France pulled out of takeover talks because of opposition from labor unions. Berlusconi has pledged to put together an Italian group to buy the airline.
"The new government can't lose any time because in this condition Alitalia will burn through cash," said Massimo Intropido, head of research at Milan-based Ricerca Finanza.
Alitalia hadn't traded as of 10:51 am in Rome yesterday. The stock fell 9.3 percent on Tuesday before the results were announced, the biggest drop in a month, and has slumped 39 percent this year, giving a market value of 678 million euros. The stock trades once a day after a single auction.
"The company requires an adequate injection of new capital" and "awaits directions from the main shareholder", Alitalia said the statement.
Agencies
(China Daily 05/29/2008 page16)
