The company which runs Milan's Malpensa airport announced on Friday 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 Chairman Giuseppe Bonomi explained that his company was ''seeking compensation for the major damages it suffered because the airline, in a change in strategy, has decided to stop using Malpensa as its hub and, in this way, violated the business partnership with SEA''.
Bonomi said legal action was inevitable and responded to management's responsibilities towards the company and its shareholders.
SEA's move was backed by Milan Mayor Letizia Moratti who agreed that it was both inevitable and obligatory.
''The project to make Malpensa a hub was born and developed based on a 2002 business partnership accord between the airline and the airport,'' she recalled.
The city of Milan is a SEA shareholder.
Alitalia announced on Thursday that it would give up its slots for most intercontinental flights in and out of Malepensa and would cancel a total of 150 flights to and from the Milan airport.
The decision was based on Alitalia's 'survival' plan aimed at cutting loses 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.
Negative reactions to Alitalia's decision to drop its slots prompted the government to call a round table discussion next week with unions, local government representatives and representatives from the ministries involved.
The carrier is currently in exclusive negotiations with Air France-KLM for the sale of the 49.9% stake in Alitalia held by the Treasury.
SEA's action came a day after AP Holding, the parent company of Italy' biggest private airline Air One, file a suit with a regional administrative court (TAR) against the decision by Alitalia, confirmed by the government of Premier Romano Prodi, to enter into exclusive talks with Air France-KLM.
AP Holding wants to be allowed to present a binding offer for Alitalia.
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.
Air France-KLM and AP Holding were the two remaining bidders for the Treasury's stake in the national carrier.
Alitalia chose Air France-KLM 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 Treasur. They are also partners in the SkyTeam alliance.
AP Holding, on the other hand, created a strong team to support its offer which included Italy's second-biggest bank, Intesa SanPaolo, with Goldman Sachs acting as financial advisor, while the investment bank Nomura joined the core banking group backing the bid.
