Bangkok--16 Dec--eTurboNews
Air France-KLM on December 11 lodged a formal complaint with the European Commission regarding the conditions under which Lufthansa intends to takeover the Austrian flag carrier Austrian Airlines.
Air France-KLM has taken part during Fall to the initial bidding process leading to the privatization of Austrian Airlines but had unfortunately to come to the conclusion that it was not in a position to submit a financial proposal in accordance with the instructions imposed by the ?sterreichische Industrieholding AG (English: Austrian industry-holding stock corporation).
The Franco-Dutch airline group claims that the agreement reached in December 2008 between the Austrian authorities and Lufthansa does not follow the instructions imposed during the bidding process on Air France-KLM, and is in particular conditioned to a 500 million euros debt cancellation by the Austrian state and based on a potentially lowered equity price for the state shareholder. The agreement signed by Lufthansa and officials of the Austrian government's privatization agency gives the German carrier the state's 41.56 percent share in Austrian Airlines. That deal carries a price tag of 366,000 euros (US$465,000) but foresees additional payments of up to 162 million euros depending on whether, and to what degree, Austrian turns profitable again. Lufthansa has also offered to buy the rest of Austrian Airlines for 4.44 euros per publicly held share.
This is not the only front Air France-KLM had to face Lufthansa in the battle for European sky. Latest reports indicate Italian unions and politicians appear to be tipping the scales toward Lufthansa and leaving Air France-KLM behind over Alitalia.
CAI, a consortium of top Italian businessmen, came to Alitalia's rescue with a 427 million euro purchase of its best assets to prevent the carrier being liquidated.
After weeks of suspense, Alitalia was kept flying after pilots and cabin crew members decided to back CAI’s rescue offer. But Italy's powerful unions could still disrupt a deal with a foreign airline. Major unions like CISL and CGIL say they prefer Lufthansa because of its multi-hub strategy.
CAI said Air France-KLM and Lufthansa are still battling it out for a stake of as much as 25 percent in Alitalia. Despite media reports that Air France-KLM had already sealed the deal, CAI chief executive Rocco Sabelli said the competition was still open. A decision will be made by the year end, with the aim of having a foreign partner in place when Alitalia is relaunched as a smaller carrier on Jan. 12, he said.