Is it Alitalia and Air France-KLM?

It is reported that Air France-KLM Board
approved today a bid of $425 million in
exchange for shares in CAI, the investment
group which tookover some of Alitalia's in
assets out of bankrptucy. CAI's Board
will vote its Alitalia shares at a meeting
Monday in Rome.

Click to read full story on Bloomberg.

It is reported Lufthansa the second-largest European carrier
after Air France, is in contact with Alitalia and there is “still the
possibility of making an offer.”

Alitalia was put into bankruptcy administration on Aug. 29 after
political and labor opposition ended two years of attempts to sell
the airline, which was 49.9 percent state-owned.

On Monday January 12 all Alitalia passenger operations

will fall to CAI, a group of 21 investors led by

Piaggio & C. SpA Chief Executive Officer Roberto

Colaninno and including the Benetton

family’s toll-highway operator Atlantia SpA and

Intesa Sanpaolo SpA.

More on travel to Italy after the jump.

Alitalia relaunch delayed to after Christmas

December 2 2008 ROME, Dec 2 (Reuters) - Italian airline Alitalia's relaunch by a group of Italian businessmen will be delayed until after Christmas to prevent travel disruptions during the peak holiday season, Italy's industry minister said on Tuesday.

He did not specify a date when Alitalia will officially operate under the CAI investor consortium's ownership, but the administrator overseeing the airline's bankruptcy said he would ensure Alitalia keeps flying until Jan. 12.
"The start of the new Alitalia will be after the Christmas vacations to avoid the most congested holiday period," Industry Minister Claudio Scajola told reporters in Brussels.

"I don't see any major problems if it becomes operational after 10 to 15 days. With all the problems we've had, this is definitely the least of them."

The deal with CAI was initially set to be wrapped up by Nov. 30, but the administrator, Augusto Fantozzi, delayed it until Dec. 12 citing technical reasons.

A source close to the matter had said CAI was unable to deliver the funds for its 427 million-euro ($539.9 million) purchase of Alitalia's best assets before then.

A new government decree allows the transfer of Alitalia's assets to CAI to be delayed beyond Dec. 12, but under the condition that all costs, risks and losses related to Alitalia are borne by CAI during the transition period.

The two sides have agreed CAI will pay 24 million euros to cover Alitalia's obligations between Dec. 1 and Dec. 12 and then pay 14 million euros weekly until it takes over. ($1=.7908 euros) (Reporting by Francesca Landini in Brussels and Deepa Babington in Rome; Editing by Greg Mahlich)

Alitalia and Lufthansa Merger?

The Guardian reports that Berlusconi is hopeful of Alitalia-Lufthansa deal to life the spirits of Europe's banks, travelers, and taxpayers this holiday season. Reuters reported Tuesday, November 18, 2008, Italian Prime Minister Silvio Berlusconi said on Tuesday both he and German Chancellor Angela Merkel were in favor of an alliance between Alitalia and Lufthansa.

Speaking at a news conference at an Italo-German summit in Trieste, Berlusconi said: "The Chancellor and I are in agreement in looking upon the possibility of an alliance between Alitalia and Lufthansa very favourably. We hope that this can take place."
Italian media have reported that Air France-KLM will edge out Lufthansa to buy a stake in the Italian carrier.