Alitalia To Be Purchased By Air France KLM

Alitalia the state airline of Italy is to be purchased by Air France KLM for a surprisingly low €139 million.

Since 2000 the airline has lost money totalling €3 billion and according to recent announcements the airline only has €300 million left in cash. It is believed that the problems Alitalia is facing are as a result of budget airlines that run many of the same routes for significantly less money.

The €139 million that Air France KLM will pay for the airline is only a fifth of its market value however as the airline appears to be only a matter of weeks from bankruptcy they are very eager to sell particually as the Italian government owns a 49.9% stake in it.

Air France KLM are to cut nearly 200 jobs at the Italian airline and will look to streamline services that operate only on profitable routes. As a result of these measures they hope to reap a profit by 2009.

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Published by: Jon Vickery