Italian railways group to start talks with Delta, easyJet on Alitalia

Italian railways group to start talks with Delta, easyJet on Alitalia
FILE PHOTO: A logo of Italian state railways "Ferrovie dello Stato" is seen at the Tiburtina rail station in Rome, Italy, April 1, 2016. REUTERS/Alessandro Bianchi -
Alessandro Bianchi(Reuters)
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MILAN (Reuters) - Italy's state-controlled railways Ferrovie dello Stato (FS) said on Wednesday it would start negotiations with Delta Air Lines and easyJet to draft a rescue plan for struggling carrier Alitalia.

Alitalia was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans, leaving the government once again seeking a buyer to save the carrier. It will be the airline's third rescue in a decade.

FS said in a statement that both Delta and easyJet had confirmed their interest in being the railway group's industrial partners in the Alitalia deal.

easyJet confirmed that it was in discussions with FS and Delta about forming a consortium to explore options for the future of Alitalia, but added that there was "no certainty at this stage that any transaction will proceed".

FS has always said it was willing to put in an offer for Alitalia provided it was flanked by one or more industrial partners.

Earlier on Wednesday, Italy's government said it was willing to participate in the creation of a "New Alitalia" via an investment from the Treasury on the condition that this was in line with European rules and that there was a sustainable business plan in place.

German carrier Lufthansa had also expressed an interest in Alitalia, but only if the airline first underwent a major round of job cuts and if it could get full control without co-ownership by the Italian government.

Once a major player in the European airline industry, Alitalia has suffered in the face of competition from high-speed trains and low-cost carriers in recent years, eroding its market share and denting its profits.

Alitalia has cost Italian tax payers almost 10 billion euros (9 billion pounds) over the last 20 years, more than the market capitalisation of Air France-KLM, Turkish Airlines, Norwegian Air, Finnair and SAS combined, according to TRA Consulting.

The sale process was initially scheduled to be closed by last April, but the process was delayed due to a change of government following national elections in March 2018.

(Reporting by Agnieszka Flak in Milan and Alistair Smout in London; Editing by Crispian Balmer)

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