Sunday, May 24, 2015

Alitalia to end deal with Air France-KLM in 2017

Alitalia to end deal with Air France-KLM in 2017
Italy's Alitalia announced it will not renew its partnership and joint venture agreements with Air France-KLM when the deal expires in 2017.

The partnership, writes Radiocor press agency, concerns the passenger services of the airlines between France, Italy and the Netherlands, along with marketing, the sale and distribution of Alitalia's cargo belly services operated by Air France-KLM. The deals date back to 2009 and 2010.

Abu Dhabi's Etihad Airways owns a 49 per cent stake in the Italian carrier since 1 January 2015. There is speculation that Alitalia discontinued the deal because Air France-KLM is a harsh critic of Middle East carriers not playing on a level field. Pulling out from the arrangement could also pave the way for Etihad to leverage Alitalia's Malpensa hub to expand its European freight footprint.

Silvano Cassano, Alitalia’s chief executive, told employees in a statement that “the agreements are no longer beneficial, either commercially or strategically, to the new Alitalia and its ambitious turnaround plan. They were negotiated when Alitalia was in a very different position, with the result that the agreements in their current forms favour the other party.”

Also in the company statement, Cassano explains that the main problem is that Alitalia is having issues with Air France-KLM not allowing it to make the necessary network changes to help strengthen the airline.

Cassano said Alitalia remains open to further discussion on finding "a mutually acceptable solution" but the contracts would not be renewed under the present terms.