Air France KLM said on Thursday that it was engaged in "exploratory talks" with Alitalia on a possible future partnership.
Air France KLM CEO Jean Cyril Spinetta said the Italian carrier had requested the talks and added that progress would depend on three key factors: the efficiency of Alitalia's rescue plan, mapping out a common strategy and the synergies which would be achieved by a partnership or future merger. Spinetta's announcement fuelled Alitalia shares in Milan which jumped 5.27% in morning trading.
The announcement from Air France KLM, currently the world's largest airline following the merger of the French and Dutch carriers, came on the same day that Italian Premier Romano Prodi voiced his doubts over Air France KLM's true intentions.
In an interview published Thursday in the French daily Le Figaro, Prodi said "I would like to know what Air France's real intentions are. Does it want to create a major European air transport group in which Italy has its place too, or simply snatch up the Italian market, which is large and very rich".
The Italian leader, who meets with French President Jacques Chirac in Lucca on Friday, added "I have always supported contracts between the Italian and French airlines. Now I have many doubts".
The premier's office said on Thursday that a possible alliance or merger between Alitalia and Air France KLM would certainly be on the agenda of Friday's talks.
Alitalia, the office said, "is a question which is very dear to Prodi's heart" and the possibility of an alliance with Air France "will be one of the topics on the agenda of the talks with President Chirac".
Air France has always been on the short list of possible partners for the troubled Italian carrier and already holds a 2% stake in Alitalia.
Last year, the French airline shelled out 20 million euros to take part in the Italian carrier's rights issue in order to maintain its quota.
The two airlines already cooperate in the Sky Team alliance which also includes Delta, Northwest and Continental of the United States, AeroMexico, Korean Air and CSA Czech Airlines.
Many observers believe Alitalia should join in the Air France KLM but before this can happen they believe the Italian carrier must first be privatized and radically curtail its runaway losses.
Alitalia last week reported fresh losses of 65.8 million euros in the third quarter compared with a 15.7-million euro profit a year earlier. The Italian carrier, which has not reported an annual profit since 2002, warned that total losses for the year would exceed its 2005 losses of more than 221 million euros.
Air France KLM, on the other hand, closed the first half of 2006 with a 30.5% jump in operating profit and a net profit of 618 million euros.
