Alitalia chair doubts backing for Air France merger

ROME (BestGrowthStock) – Alitalia Chief Executive Rocco Sabelli intends to recommend a merger with Air France-KLM (AIRF.PA: ) according to extracts from a book to be published this week, but the Italian carrier’s chairman doubted the plan would get shareholder backing.

Air France-KLM has a 25 percent stake in Alitalia, which was bought by a group of Italian investors put together by Prime Minister Silvio Berlusconi to save the airline from a foreign takeover in 2008.

“My personal opinion, which I will transform into a recommendation to shareholders, is to construct a merger between the two companies to create a larger combination,” said CEO Rocco Sabelli, according to extracts from the book by prominent Italian journalist Bruno Vespa.

Sabelli said the Italian shareholders of Alitalia could aim to become the new group’s second main shareholder after the French government “in order to keep the Italian ownership at a relevant role.”

There was no immediate comment from Air France-KLM but Alitalia chairman Roberto Colannino dismissed Sabelli’s idea of a merger with the French group.

“It may be a thought of Sabelli’s, but it’s not shared by shareholders,” Colaninno told reporters.

In the same interview extracts, Berlusconi, who has stopped the French group from taking control of the Italian airline once before, was quoted as saying that “Alitalia must remain Italian.”

In 2008, Alitalia was on the edge of bankruptcy under the weight of a heavy debtload, persistent strikes and high costs.

The center-left government led by then-Prime Minister Romano Prodi had selected Air France as the best candidate to buy from the State the controlling stake in the Italian carrier.

But Berlusconi’s promise to keep Alitalia in Italian private ownership helped him win the 2008 general election.

The airline was bought by a group of Italian investors led by Colaninno, head of Piaggio (PIA.MI: ), the scooter company which was run by Sabelli himself.

Air France-Klm was given a 25 percent stake.

Alitalia’s investors are committed not to sell their stakes until 2013.

(Writing by Giselda Vagnoni; additional reporting by Giancarlo Navach in Milan; editing by Elaine Hardcastle)

Alitalia chair doubts backing for Air France merger