Europe's Largest Airline closer to being bigger!

Europe's largest airline, in terms of passengers flown, Air France-KLM has been given the green light to enter final negotiations to purchase Alitalia.

Italian government voted yes to allow Alitalia to be saved from bankruptcy by being taken over by Air France-KLM. The restructuring will involve rationing of the Milan Malpensa hub (all long haul will be moved to Rome for example) and the fleet will be reduced.

Analysts are saying this will have a huge knock on effect for LHR- with AZ's slots now being, in effect, under full Skyteam control. This has already been felt by VS and BA with the Milan Malpensa flights being scrapped allowing 3 slots at LHR for CO and NW.

The final go ahead is to be given in mid january but the major hurdle of the Italian Government has been overcome. Unions are threatening to reject the AF-KL bid partly due to the closing of MIlan.

Air One (part owned by LH IIRC) is the only other real bidder at the moment.

The new company will look as follows:

AF-KL-AZ Hubs:
CDG
AMS
FCO

AZ's future Fleet:
Short/Medium Haul
A319
A320
A321
Emb's

Long Haul
A330-200
772
773 (not confirmed but thought will be used for JFK and some far east services)

THe 763's will go asap as will the MD-82's and ATR's.

And I hope they're not buying a dud! With Alitalia currently losing Euro 1m per day ( [:0] ) AF/KLM need deep pockets or good cash from the Italian government to make it work, then not least the management focus to work effectivly with the staff and turn the airline around.

No wonder BA kept out of it - I wonder where this leaves BA however ... consolidation in Europe continues, is strongly rumoured in the US and unless BA finds a partner it will become a tier-2 airline. That is of course unless it can merge with AA as long desired!

Virgin seems happy with it's organic growth and global regional airlines and looser connections ...