Italy’s Alitalia says it is unlikely to purchase smaller carrier Volare | VailDaily.com
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Italy’s Alitalia says it is unlikely to purchase smaller carrier Volare

ROME – Alitalia SPA said Thursday it is unlikely to purchase smaller carrier Volare after Italy’s antitrust regulator said Alitalia would have to give up four routes before it can go ahead with the takeover.Italy’s state-controlled airline said in a statement that its planned purchase of Volare was likely to end up “dying in the courts,” referring to several legal cases against the loss-making carrier.The acquisition, worth nearly 40 million euros ($51 million), was put on hold after Italy’s highest administrative court in May said there had been irregularities in the bid process.The court’s ruling came in response to complaints by another Italian airline of unfair competition. Air One, the second-highest bidder in the auction for Volare, claims Alitalia is an unfair competitor and lacks the qualifications to buy another airline after avoiding bankruptcy last year.The regulator said Wednesday that Alitalia must give up two domestic slots from Milan’s Linate airport, and two more on its Milan-Paris route to avoid violating competition rules.Alitalia sharply criticized the antitrust body, saying its analysis wasn’t “professional” and its decisions hurt the country’s airlines to the advantage of other carriers in Europe.Alitalia has forecast it could lose 125 million euros ($159 million) in revenue by 2008 if Volare goes to domestic rival Air One.The airline posted a first-quarter operating loss of 129 million euros ($164.3 million), as fuel costs and strikes weighed on earnings. The carrier is struggling to meet the targets contained in its turnaround plan.


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