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Milan airport operator sticks to 1.25 bln euro Alitalia damage claim UPDATE

29-Apr-2008

(Updates to add further SEA comments on 2008 traffic, Lufthansa plans, results)

Milan (Thomson Financial) - Milan airport operator SEA said it is sticking to its 1.25 billion euros damage claim against Alitalia SpA over the airline's downscaling of its activities at Milan's Malpensa airport.

Speaking at a news conference, SEA chairman Giuseppe Bonomi said that Malpensa has already replaced more than half of the 800 weekly flight movements cut by Alitalia. While sticking to the 1.25 billion euro claim, Bonomi said SEA is nevertheless ready to examine with "great attention" any settlement offer made by Alitalia.

Bonomi declined to make further comments on Deutsche Lufthansa AG's plans at Malpensa after the airline announced this morning that it will base six aircraft at the airport from the start of 2009.

In other comments on Alitalia, Bonomi said the airline has seen a significant fall in its load factor since the start of the year, not just at the Milan airport but across its entire network. In further comments, SEA said that from January 1 to April 16 this year, Milan airports traffic, including the Linate city airport, fell 1.3 percent in passenger terms and 2.5 percent in movements.

At Malpensa, there has been a 2.3 percent reduction in passengers and 3.1 percent fall in movements, it said. In full year 2007, Malpensa passengers rose 9.7 percent, well above the 5.2 percent international average growth for big airports, it said.

In 2008, Malpensa will add more than 440 new weekly services, with expansion by existing operators and arrival of new airlines such as American Airlines, AirSeychelles and FlyNiki, it said. In the first quarter, Malpensa passenger numbers, excluding feeder and transit traffic, was equal to the average of the medium to high season period last year, such as in July, Bonomi said.

"We are convinced that we can recover traffic in a quicker time than we previously thought. With Lufthansa, we have presented the first positive result, but not the definitive result," he said. Today's Lufthansa announcement is "a solid basis for expansion and relaunch of Malpensa, he said, noting that Lufthansa is a consolidator in the sector as well as having various alliance partners.

"This start (with Lufthansa) is not the end of the course. We need to construct the partnership step-by-step," he said.

The Lufthansa arrival from next year will involve its unit Air Dolimite, which operates regional services, SEA said. Bonomi declined to comment on any Lufthansa long-range routes, though said that Alitalia's exit will require the government to negotiate new flying rights with countries around the world.

These previous agreements were negotiated over the last 40 years and reflect "hyper-protectionism" to protect Italy's flag carrier, Alitalia, while today there is liberalisation, he said. In further comments on sticking to the 1.25 billion euro Alitalia claim, Bonomi said the airline broke contractual agreements to operate a hub at Malpensa, for which new arrivals don't compensate.

In its 2007 results, SEA's net profit of 34.5 million euro was broadly in line with a year earlier, but would have been 64.4 million without write-downs linked to Alitalia's Malpensa exit, it said.

SEA sales rose 6.1 percent to 691.5 million euro, it said. Bonomi declined to comment on possibility of a third runway at Malpensa beyond noting SEA is will produce a new business plan in May.


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