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Delta refuses to sweeten Alitalia investment offer

In spite of competition from German flag carrier Lufthansa, U.S. major Delta Air Lines remains firm in an offer to take no more than a 10% stake in a reformed Alitalia. The Italian government is seeking €1 billion ($1.1 billion) in investment to relaunch Alitalia.

“Delta is continuing to work with Ferrovie dello Stato (FS) and Atlantia and it can confirm that it is ready to invest up to €100 million for a 10% stake in Alitalia,” a Delta spokesperson told Italian public news agency ANSA on Nov. 11. 

The government has extended to Nov. 21 the deadline for a binding offer on troubled Alitalia after a previous deadline expired on Oct. 15 without an offer on the table.

On Oct. 17, Lufthansa expressed an interest in buying a stake in Alitalia, calling for a deal that would give private shareholders majority ownership. Lufthansa previously has openly stressed that any financial participation would be predicated on massive job cuts and the absence of any Italian government involvement.


As previously reported by FreightWaves, the Italian government in September asked Delta to boost its offer by committing to a 15% stake in Alitalia with a correspondingly higher offer. Privatized in 2008, but under administration since May 2017, Alitalia has not turned a profit since 2002, losing approximately €343 million on €3.3 billion of revenue in 2018 alone.

As part of a rescue plan to resurrect Alitalia, Delta or Lufthansa — but not both — would become a cornerstone investor. Complicating the choice of a partner airline, Delta and Alitalia are SkyTeam members, while Lufthansa is a member of the Star Alliance. A further complication to getting a deal done is that Alitalia is in the midst of a labor disagreement with pilots and cabin crew.

Another cornerstone investor in Alitalia would be Italian state-owned railway group FS with a 40% stake. Italian holding company Atlantia, active in the infrastructure sector, including motorways, airport infrastructure and transport services, also has been linked to a proposed 30% investment in Alitalia for about €300 million. 

Alitalia has no dedicated freighter aircraft, but uses the belly-hold capacity of passenger aircraft for cargo operations.