Possible takeover of Alitalia by Air France?

Air France/KLM, the airline group that's the largest in Europe, said yesterday that it was in talks with Alitalia about a possible takeover of the Italian flag-carrier. Alitalia is half-owned by the Italian government, and hasn't made a profit since 1998, but has instead remained flying over the past few years due to government bailouts. A potential problem that stands in the way of the airline's profitability is the fact that it has two main hubs: one in Milan and one in Rome. Most European airlines, by comparison, really have one main hub: British Airways in London, Lufthansa in Frankfurt, Air France in Paris, Iberia in Madrid, etc. Alitalia also has to deal with a bunch of new start-up airlines as well.The chances of such a takeover aren't very good. The Italian unions have voiced their displeasure, as has the Italian prime minister, Romano Prodi. "I would like to know Air France’s real intentions. Does it want to create a big European transport group in which Italy would also have a place, or simply grab the Italian air transport market, which is large and very lucrative?” he said in the French newspaper Le Figaro.Air France and Alitalia are already members of the SkyTeam Alliance.

Air France retires Boeing 737

Yesterday, French carrier Air France retired the Boeing 737 after 25 years of service. According to a press release issued by the airline, Air France ordered twelve Boeing 737-200s in 1982 - the first aircraft ordered by Air France that required only two pilots.Yesterday's flight was flown by F-GJND, a Boeing 737-500, which was delivered to Air France in December 1991 and flew over 34,500 hours four the airline. The flight, AF1703, was from Turin to Paris and was flown by Eric Monlouis, the head of the airline's 737 division.Air France, which has operated the -200, -300 and -500 versions of the 737, now uses an all-Airbus fleet (comprised of the A318, A319, A320 and A321) on its short and medium haul routes.

Ryanair to sue EU as EC investigates Ryanair

European discount carrier Ryanair has said that it will sue the European Commission, the antitrust regulatory body of the EU, because it failed to look into complaints about state aid given to Air France and Lufthansa.Ryanair alleges that Air France received discounted airport fees from the French government and that Munich airport in Germany is building a new terminal for Lufthansa, even while the airport loses money. Ryanair also accuses the EC of approving "mulitbillion bailout packages" for Alitalia, while Olympic Airways has benefited from "massive injections of state aid" from the Greek government.At the same time, the European Commission has launched an investigation into government aid grants by Finland and Germany for regional airports - the kind that Ryanair typically uses. The EC ruled a few years ago that the airline received illegal aid at Charleroi Airport, in Belgium, and Ryanair had to pay part of it back.

Last A300 delivered

The last ever Airbus A300 was delivered today to FedEx, making a total of 821 Airbus A300s and A310s ordered. The A300 was launched in May 1969, with the first airplane entering commercial service with Air France in May 1974. It was the first wide-body, twin-engine aircraft, and it led to the creation of the A310, which was launched in July 1978 and first flew in April 1983 with Swissair and Lufthansa. FedEx is, according to Airbus, the largest customer for the A300/A310, with more than 120 of the types currently in service. Airbus expects that half of the current fleet of 630 A300/A310s will still be in service beyond the year 2025.Airbus has also released a short video about the A300.

Air France and Delta might become closer

The AFP and the French newspaper Les Echos are reporting that Air France is in joint-venture talks with Delta Air Lines, which is a fellow SkyTeam partner. A spokeswoman for Air France said that it "is still in negotiations with Delta, but nothing has been finalized". She also said that "the agreement being negotiated should be signed in the autumn."The joint venture would happen in two stages - the first would start in April 2008 and include New York - Paris flights, as well as flights from Heathrow airport in London to cities in the US. In 2010, the second stage would cover the rest of Air France and Delta's trans-Atlantic flights. Les Echos reports that both airlines would split their profits from their main trans-Atlantic routes 50-50.Air France-KLM, Northwest, and Delta have also applied for a joint venture agreement. Northwest and KLM have been close partners for more than 15 years, and this venture, if successful, will bring the four much closer together than they already are (all are SkyTeam members).

Three interested in Alitalia

Italian Prime Minister Romano Prodi recently said that Air France/KLM, Lufthansa, and Italian domestic carrier Air One were interested in making a bid for struggling Alitalia. (Previously interested Aeroflot has already quit the bidding.) All bidders have until December 6 to make a non-binding offer. In an interview with the German newspaper Frankfurter Allgemeine Sonntagszeitung, Lufthansa CEO Wolfgang Mayrhruber said that "Alitalia has big and barely manageable problems. We are studying whether we can find a recipe (to fix these) and make a bid."It should be pointed out that Alitalia is losing about 1 million euros a day and is affected by frequent strikes (both inside and outside of the company). If one of those airlines is going to make a bid for Alitalia, they'll have to deal with "big and barely manageable problems" indeed.

MAXjet suspends shares

“Boutique airline” MAXjet Airways today requested that its shares be suspended in advance of a statement from the airline about its rather precarious financial situation. MAXjet flies five Boeing 767-200s from London-Stanstead to three US cities (JFK, Las Vegas, and Los Angeles) with around 100 leather seats apiece and four-course meals (not to mention champagne cocktails and canapés). The airline went public in June, but has since flown into a rough patch (their stock has fallen 50% and new route from London to Washington was axed, in addition to planned service to Miami starting next February).Not all the news is negative, though. MAXjet carried 47% more passengers last month than it did last November, while the airline’s load factor increased 11% to 69%. But although more seats are being filled, MAXjet is finding it harder to make money. Lots of factors – increased competition with carriers like Silverjet and EOS, high oil prices, and a weak US dollar (which particularly affects an airline with so much UK-based traffic) could be to blame. The airline’s loss increased to $49.5 million in the first half of 2007, up from $30.4 million in the same period a year ago.According to MAXjet, everything is business as usual, for now. The airline’s announcement about its finances, according to a statement released by the airline, will “be made as soon as possible”. “The company wishes to confirm to its employees, customers and suppliers that business continues to function as normal.” Whether or not MAXjet will be able to get over this remains to be seen – the transatlantic business travel market is notoriously competitive, and with British Airways getting in on the game soon, things aren’t likely to ease up. If BA arch-rivals Air France or Lufthansa also consider entering the premium transatlantic market at a more competitive rate (and Lufthansa has already made moves towards doing this), they could seriously jeopardize the futures of all-business class airlines like MAXjet.