Alitalia Plays the Dating Game

Alitalia, Worst Airline Ever

Today was the deadline for showing interest in buying a share of my favorite whipping boy Alitalia from the Italian government. We had heard a lot of people object in the past to the onerous terms – no layoffs or real route restructuring – but there was still interest from a surprising 11 buyers.

So, Jim, let’s meet our suitors on this week’s edition of . . .

alitalia

Most of our suitors are private equity firms. Notably, we see Texas Pacific Group in there. These guys have done wonders in the past of investing in airlines, bringing in stellar management to fix them up, and then getting out of there with some good money. Every company has a price that makes sense for these guys, so if they can get the price low enough, it will be worthwhile for them. The question is, how low will they have to go?

Other than private equity companies, there’s one lone airline bidder. Air One, Italy’s second largest airline, would like to get in there and take over. I would be surprised if Italy let this happen simply because it might actually make sense. Both Lufthansa and Air France/KLM, both thought to potentially have had interest, said they weren’t going to jump in.

The next step is for Italy to go through and determine which bids should be allowed to move on to the next round. This will of course be determined after the swimsuit and formalwear competitions.

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