Milan airport to survive Alitalia shift

January 12, 2009

, ROME, January 12 – As Alitalia readied for takeoff as a private company this week, Prime Minister Silvio Berlusconi sought to reassure his political allies in the north that Milan\’s Malpensa airport will survive the overhaul.

The new Alitalia, which has merged with domestic carrier Air One and ceded a 25 percent stake to Air France-KLM for a reported 310 million euros (415 million dollars), will originate most of its inter-continental routes from Rome starting Tuesday.

The deal with Air France — expected to win approval by the Alitalia board of directors on Monday — "does not mean that Malpensa will be abandoned as a hub," Berlusconi told a meeting Sunday of his centre-right People of Freedoms party.

"There is no serious concern for Malpensa, which will have the same passenger flows and maybe even more thanks to increases by other foreign companies," Berlusconi said.

The government has come under fire for "underselling" the airline as an Italian investor group sealed a billion-euro deal to take it over in December, nine months after Berlusconi helped to torpedo a takeover bid by Air France.

A "Save Malpensa" amendment has been added to a government plan, currently before parliament, to address the effects on Italy of the global financial crisis.

The measures are aimed at bolstering traffic through Milan, from where the streamlined new Alitalia will operate just three intercontinental flights — to New York, Sao Paulo and Tokyo.

The total number of daily routes has been slashed by more than a third, from 1,050 flown by Alitalia and Air One each day a year ago to 670.

Berlusconi, who himself hails from Milan, won elections last April in coalition with the regional Northern League party, which lobbied for Alitalia to partner with Germany\’s Lufthansa.

Alitalia\’s powerful unions also preferred Lufthansa, which has a multi-hub setup, and Tuesday\’s relaunch may be snarled by labour action.

Berlusconi was instrumental in torpedoing a takeover bid by Air France ahead of the 2008 polls, insisting on a "Made in Italy" alternative in what was seen as a vote-getting ploy.

The "Save Malpensa" amendment calls for bilateral accords to increase the number of domestic, international and inter-continental slots allowed at Malpensa.

Berlusconi on Sunday hailed what he termed "a very advantageous contract" agreed last week between CAI and Air France, even if "the door was never shut" to Lufthansa.

The prime minister said the German carrier had failed to make a concrete proposal.

The flamboyant media tycoon had said in November — during a visit by German Chancellor Angela Merkel to northeastern Trieste — that Lufthansa offered "numerous advantages" with regard to use of Malpensa airport in the export-driven north.

The remarks came as CAI was about to announce its preference for Air France-KLM, and forced a postponement of the decision to the end of the year, news reports said.

Northern politicians and business leaders lobbied hard for CAI to select the German airline, which was expected to favour Milan-centred business traffic over tourist travel centring on Rome.

The Italian government has been trying for years to sell off its 49.9 percent stake in Alitalia, a symbol of Italian industry for more than half a century which was on the verge of bankruptcy when CAI took it over.

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