Air France Says No Secret Alitalia Takeover Deal

February 2, 2009

Air France-KLM has not negotiated a secret deal to acquire control of Alitalia at some future date, the French group's chairman said in an interview in Italian newspaper Il Sole 24 Ore on Sunday.

"There is no secret pact, no side letter," Jean Cyril Spinetta was quoted as saying.

After a failed takeover last year when the Italian national airline was riddled with debts and losses, the French carrier came back less than a year later to secure a better deal, paying less than a fifth of its earlier offer for a 25 percent stake in a cleaned-up Alitalia stripped of its debt.

Alitalia is controlled by the CAI consortium of Italian businessmen.

Spinetta said that as a listed company it would not have the right to sign any such secret deal with CAI.

Asked whether Air France intended to increase its stake in Alitalia, Spinetta noted the agreement allowed the Italian investors to buy out the French carrier if they so wished, through the exercise of a call option.

"We are engaged, the idea of marriage could happen but separation could too. We can't talk of divorce since we are not married yet," he said.

Spinetta said the CAI consortium had decided the new Alitalia could use Milan's Malpensa Airport as a base if the city's other airport, Linate, was dedicated to domestic flights only.

Otherwise it would use Rome's Fiumicino as its base, he said.

Spinetta said combining smaller Italian airline Air One into the group had been a winning strategic move.

Speaking of the airline industry in general, Spinetta said he believed, and hoped, it did not require state aid.

He said consolidation of the industry will go ahead despite the economic crisis.