The situations at Alitalia and Milan's Malpensa airport are serious and need solutions from the market place and not political rhetoric, Industry Minister Pierluigi Bersani said on Monday.
The minister made his remarks ahead of a roundtable discussion later this week between unions, local government representatives and representatives from the ministries involved in Alitalia's privatization.
''We must sit down at this table with the utmost serenity and without demagoguery. The problem at hand is a very serious one and those who are trying to make it look simple had five years to deal with it
''The result is what we find ourselves with today: a marriage between Alitalia and Malpensa which does not respond to market criteria,'' Bersani said.
The minister was referring to the previous center-right government of Silvio Berlusconi as well as the center-right administrations for the city of Milan and region of Lombardy which lobbied to have Malpensa become Alitalia's second hub in Italy after Rome.
In regard to a new domestic offer for Alitalia from AP Holding, as an alternative to one from Air France-KLM, Bersani said ''I have been reading about this for some time in the press. An offer can still be presented as long as it respects procedure and is absolutely transparent. It cannot be presented via the press''.
According to Bersani, ''the privatization of Alitalia is a very complicated matter. If Alitalia fails then Malpensa will also. A solution is needed for Malpensa within the framework of the air transport system in northern Italy. There are no magic wands and the solutions for both Alitalia and Malpensa must be found on the market''.
Alitalia is currently in exclusive negotiations with Air France-KLM for the sale of the Treasury's 49.9% stake in the national carrier.
However, a regional administrative court (TAR) must decide this week on a protest lodged by AP Holding, the parent company of Italy' biggest private airline Air One, over the validity of exclusive negotiations.
AP Holding maintains that it, too, is ready to make a binding offer for Alitalia which must be examined together with that of Air France-KLM.
Making the situation even more complicated was the announcement last week by SEA, the company which runs Milan's airports, that it will sue Alitalia for 1.25 billion euros because of the national carrier's decision to drastically cut back service at Malpensa.
SEA said by reducing Malpensa's status Alitalia had violated its business partnership with the airport management company.
The decision to cut service at Malpensa was based on Alitalia's 'survival' plan aimed at cutting losses in order to make the airline more attractive for privatization.
The plan, drawn up by CEO Maurizio Prato, calls for concentrating the airline's services at only one hub, Rome, and cutting loss-making routes.
Having Malpensa as a second hub reportedly costs Alitalia some 200 million euros a year.
The downfall of Italy's center-left government has complicated matters even further. This because a probable return of a center-right government would create a situation more favorable to pro-Malpensa lobbying.
For the first time, Air France-KLM admitted on Monday that the government's downfall could complicate negotiations but that they were, for the moment, continuing.
The government decided at the end of 2006 to sell most if not all of the Treasury's stake in Alitalia. An attempt last summer to auction the stake failed after all the bidders dropped out because of the conditions imposed by the Treasury.
It was then decided that Alitalia management would negotiate the direct sale of the Treasury's stake, with the government having the final word on the deal.
Alitalia chose Air France-KLM over AP Holding because it said it offered the best guarantees for the national carrier's future.
Air France-KLM, Europe's biggest airline, had been a front runner from the start thanks to its size as well as the fact that it already owns a 2% stake in Alitalia, making it the second biggest shareholder after the Treasury. They are also partners in the SkyTeam alliance.
