Italy to discuss selling state-owned ITA Airways to Air France-KLM consortium

The Italian government will enter into exclusive negotiations with a consortium comprised of Air France-KLM, the investment fund Certares and the American company Delta Air Lines about a takeover of the Italian airline ITA Airways. The talks were announced by the Ministry of Finance.

ITA is the successor to Alitalia, which flew its last flight in bankruptcy last year. That company was kept afloat by the Italian state, and was restarted under the new name and in a slimmed-down form.

The Italian government wants to privatize ITA and the group made up of Air France-KLM, Certares and Delta has been invited to discuss coming to terms on a deal. "At the conclusion of the exclusive negotiation, binding agreements will be signed only if the contents are fully satisfactory for the public shareholder," the Italian Ministry of Finance said.

A rival offer from the German aviation group Lufthansa was therefore rejected. Lufthansa was collaborating with MSC, the Swiss-Italian cruise ship operator that also offers container transport.

Outgoing Prime Minister Mario Draghi had said at the beginning of August that he still wanted to complete the sale of ITA. Draghi has offered to resign from his government, but will remain as head of government until a new government is formed. Elections will be held in Italy on September 25.

Air France-KLM has announced that if the deal is completed, the aviation group will become a commercial and operational partner of ITA. The Franco-Dutch company would not immediately become a shareholder, but this could change in the mid-term after a deal is completed.