Sunday, December 23, 2007

Lobbying begins against Air France bid for Alitalia

Air France-KLM's bid for Italy's state-controlled airline, Alitalia, has triggered a frenzy of holiday lobbying by powerful opponents who want Rome to reject an offer they say harms national interests.

Alitalia's board of directors late on Friday chose Air France-KLM for exclusive talks. The decision must still be ratified by the ailing flag carrier's top shareholder, the Italian state.

Ahead of a promised government decision by mid-January, politicians and labor leader are telling the state to find a better buyer for Alitalia -- a source of national pride even though it loses 1 million euros ($1.44 million) a day.

"It's folly," said Roberto Formigoni, governor of Lombardy region, home to Italy's financial capital Milan.

"Air France (has) a strategic interest in cutting its most significant competitor in half," he told Italian media.

Formigoni and other politicians in Italy's wealthy north predict Alitalia will be swallowed the Franco-Dutch airline, the world's biggest by revenues.

They also predict Air France-KLM would treat Alitalia as a more of a regional airline and transfer major routes to Paris to the detriment of Milan's Malpensa airport, sending businessmen there to make tedious connections when flying abroad.

A member of the northern, separatist party Northern League threatened to block the roads leading to Malpensa in protest.

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