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Rome - Alitalia is in a "comatose" state and cannot repay over ¬1 billion ($1.9 billion) in debt due in the next three years, its chairman said yesterday, raising new doubts on whether the Italian airline can survive without a buyer.
The carrier is expected to lose just
under ¬400 million excluding special items this year, and needs a strong alliance to turn its fortunes around, chairman Maurizio Prato told a Senate hearing.
Alitalia, worth about ¬1.1 billion, has begun a fresh hunt for a suitor to resuscitate it after an auction for the Italian state's controlling stake collapsed in July.
"Alitalia is in a comatose state, it's on life support and I am very surprised by the almost general state of denial," said Prato, who was appointed last month.
He also attacked Alitalia's labour unions for their attitude to the carrier's worsening condition.
"I was expecting a different type of response, given the time I dedicated in August talking to them," he said. "They negotiate, but then they overrule us and ask for a meeting with the government like they did in the past few days."
He said the company did not have enough money to repay ¬320 million of loans in the next two years or ¬714 million worth of bonds due in 2010.
Alitalia said that the 2007 loss forecast of just under ¬400 million to which Prato referred during the hearing was only a mathematical estimate for the entire year based on first-half losses of ¬211 million. The airline reiterated that results would improve slightly from 2006, when it posted a loss of ¬626 million after writing down the value of its fleet by ¬197 million.
Since the auction for Rome's 49.9 per cent stake in the airline flopped, Alitalia has had initial meetings with potential suitors and unveiled a new three-year survival plan to keep it afloat while the search for a buyer continues.
The airline is touching base with the major European carriers, big North American airlines, airlines from the Emirates and all who took part in the collapsed auction as part of its renewed effort to find a buyer, Prato said. No clear front-runners have emerged so far, although small domestic rival Air One has expressed interest and had a meeting with Alitalia's sale adviser last week. Russia's Aeroflot, another of the three parties short-listed in the failed auction, denied an Italian news agency report it was still in the bidding.
Italian media said long-time commercial partner Air France-KLM could step in despite snubbing the failed auction. Air France-KLM head Jean-Cyril Spinetta said on Monday he expected talks on a possible alliance to start next month.
- Reuters