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Alitalia reportedly in alliance talks with Swissair

Swissair-Alitalia-Air France graphic swissinfo.ch

The Italian national carrier, Alitalia, says it is holding talks with Swissair and Air France to forge a partnership in the rapidly consolidating airline industry.

This content was published on September 19, 2000 - 22:44

The move follows the collapse earlier this year of Alitalia's collaboration with the Dutch airline company, KLM.

A company spokesman told the Financial Times newspaper that negotiations were underway with both airlines.

Swissair declined to shed further light on the news.

"We have no comment on this report", said Swissair spokesman, Jean Claude Donzel. "Our chairman regularly meets other key executives of the airline industry."

Alitalia has had a poor year. Besides the collapse of its partnership with KLM, there has been uncertainty over the future of its hub at Malpensa, near Milan, and poor half-year results.

Losses for the first six months of the year grew to SFr267 million ($150 million). That's three times more than losses registered for the corresponding time period in 1999.

However, analysts say an alliance with Alitalia could have many advantages for Swissair.

Even with the current expansion underway at Zurich airport, they say Swissair will need greater capacity, and entering a market with a population of 58 million people could be appealing.

But for Alitalia, a link-up with Air France may appear more attractive. The company has a bigger international network than Swissair and is already committed to developing its Lyon hub.

SAir, Swissair's parent company, is already trying to expand its network. It recently took an 85 per cent stake in the Belgian airline, Sabena and is merging three French regional airlines in which it has big stakes.

by Michael Hollingdale

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