MILAN Feb 3 Alitalia is about to finalise loan
agreements with banks for up to 200 million euros ($270 million)
pledged last year to help keep the Italian airline flying while
it finds a potential new partner, its chief executive said.
The loans are part of a 500 million euro emergency package
put together to give the troubled airline enough cash while it
restructures and finalises talks with Etihad Airways on a
"In a few hours we will sign the loan agreement with the
banks and give Alitalia addition financial means," Gabriele Del
Torchio told RAI Radio1.
The bank financing and a 300 million capital increase, which
Alitalia completed in December, are expected to keep the carrier
in the air for about six months, analysts have said. But the
airline urgently needs a strong industrial partner such as
Etihad to remain profitable in the long term.
Alitalia offers access to Europe's fourth-largest travel
market and flies 25 million passengers a year, but has been hit
by competition from low-cost carriers and high-speed trains.
Alitalia and Etihad Airways are in the final phase of due
diligence for a possible investment by the Abu Dhabi group in
Alitalia, the companies said on Sunday.
A tie-up with Etihad could boost Alitalia's liquidity and
allow it to invest in a new strategy focused on long-haul routes
that could make it profitable again, analysts have said.
Alitalia's revised industrial plan - which includes cost
cuts of around 300 million euros - and the airline's debt of 813
million euros at end-September are at the centre of the tie-up
talks with Etihad.
One of Etihad's conditions is for banks to write off parts
of the airline's debt, a source close to Alitalia said, which
banks have so far refused to agree to.
Lack of agreement over a debt restructuring has also
contributed to Alitalia shareholder Air France-KLM's
decision to shun the Italian firm's cash call. This resulted in
Air France-KLM's stake in the Italian carrier falling to around
7 percent from 25 percent.
"We are in the most delicate phase of the talks ... but I
have no doubt that all will do their part," Del Torchio said.
The banks exposed to Alitalia's debt include Italy's two top
lenders UniCredit and Intesa Sanpaolo, Monte
dei Paschi di Siena and Banca Popolare di Sondrio
Del Torchio said Air France-KLM remained an "absolutely
"We have a commercial agreement with them that will last at
least until 2017, and they remain therefore a viable partner,"
Del Torchio told the radio station.
Alitalia and Air France-KLM are both members of the SkyTeam
alliance, a group of 19 airlines with a seat-sharing agreement.
The CEO of the Franco-Dutch group said last month the
airline would look at reinvesting in Alitalia if its conditions
on debt restructuring and cost cuts were met.
($1 = 0.7415 euros)
(Reporting by Agnieszka Flak. Editing by Jane Merriman)