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Air France-KLM says conditions not met for merger with Alitalia

1-Sep-2006

Paris (XFNews) - Air France-KLM's chief operating officer Pierre-Henri Gourgeon said the preliminary conditions for a merger with Alitalia "are not yet met", during a conference call following the airline's release of first quarter results.

Air France-KLM owns a 2 pct stake in the Italian airline, and speculation of an eventual tie-up between the two has circulated for several months.

"There are a certain number of preliminary conditions that are not totally met, and we are calmly waiting for the financial recovery of Alitalia," Gourgeon said.

He also denied a recent French press report that suggested the French government would push Air France-KLM to provide financial support to Alitalia in return for a pledge that Enel SpA would abandon any ambitions of a takeover offer for Suez.

Enel's reported interest in Suez is widely seen as the reason Suez announced a merger plan with state-owned Gaz de France in February.

"There is no complicated political-economic scheme whereby we mix electricity, natural gas, air transportation, France and Italy. This is purely and simply an invention," Gourgeon said.

Concerning delivery delays of the new Airbus A380 superjumbo, Gourgeon said the airline is currently negotiating financial compensation for late delivery of two of the 10 firm A380s on order.

"The negotiations have not yet concluded, and we hope to reach an agreement with Airbus on the amount in the next two months," he said.

The first two superjumbos were to be delivered in the summer of 2008, but Airbus announced earlier this year that the A380 programme is running 6-7 months behind schedule. The company has not yet said when the first planes for Air France-KLM will be delivered, Gourgeon said.


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