Lufthansa offers 300 million for Alitalia

Rome - Lufthansa still sees major obstacles in turning Alitalia into a profitable venture, from refinancing to the rights of flight attendants.

Rome - Lufthansa is now firmly focused on acquiring Alitalia. With its bid for Austrian airline Niki being blocked, the German airline intends to concentrate on buying the Italian firm, for which it is ready to offer 300 million. It, however, immediately qualified the offer. In fact, Lufthansa still sees major obstacles in turning Alitalia into a profitable venture, from refinancing to the rights of flight attendants: thorny issues that the German company intends to resolve with the Italian government prior to any acquisition. Lufthansa’s intentions were revealed by the business daily Handelsblatt, quoting sources close to the German airline’s management. “With the bid for Niki falling through, funds have been freed up, and Alitalia is an important strategic objective for Lufthansa”, explained the newspaper, which mentions Harry Hohmeister, a 53-year-old member of the board, in charge of Lufthansa’s major hubs, as the person spearheading the Alitalia acquisition. From the Cologne headquarters, however, “enormous obstacles” appear to loom large with the Italian company which is under special administration: starting with a reorganization which Lufthansa does not intend to tackle. Then there’s the problem of the benefits accorded to Alitalia flight attendants, such as the right to live in Rome while stationed out of Milan, or being shuttled to Milan at the company’s expense. Unless these privileges are eliminated, explained the sources, the acquisition is “hardly possible”. Finally, there’s an obstacle of an economic order: the company would offer 300 million, but in Rome they’re expecting 500, explained the daily, which also questions the repayment of the bridging loan given to Alitalia, which stands at a total of 900 million. Meanwhile, Ryanair closed 2017 with a definite slowdown in passengers, due to the chaos it created by scrapping thousands of flights. Overall, the Irish low-cost carrier transported 129 million passengers, an increase of 10% compared to the previous year (+ 15% in 2016), but two million less than initially forecasted. December was the worst month for the airline, with growth in traffic of just 3% to 9.3 million passengers, the lowest rate since March 2014. Ryanair CEO Michael O’Leary has cut the passenger forecast for 2018 by 4 million to 138 million customers.

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