Alitalia may need to seek (another) last chance as funds shrink

Alitalia had another bad start to the year. Its 1H2013 net loss, reported on 26-Sep-2013, was EUR93 million worse than the same period last year and it faces the real prospect of running out of funds before the year end.

Only eight months after requesting an emergency loan from shareholders, its Board will seek a EUR100 million capital increase at a shareholders' meeting on 14-Oct-2013. 25% owner Air France-KLM has signalled opposition to this plan and this sum may not even be sufficient beyond the short term.

Alitalia's 2013-2016 industrial plan, announced only in Jul-2013, aims for breakeven at the net profit level in 2015. This will not be worth the paper it's written on if Alitalia does not manage to raise survival funds quickly. The Italian government, although not a shareholder, is reported to be talking to Italian banks about additional loan finance. If Alitalia's short term needs can be met, this could give vital breathing space for a long term solution to be found, possibly involving new shareholders. But more "last chances" cannot be anticipated.