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Alitalia Not To Renew Its Air France-KLM Partnership

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Alitalia Not To Renew Its Air France-KLM Partnership

Alitalia Not To Renew Its Air France-KLM Partnership
May 19
15:18 2015

MIAMI — Alitalia will not renew its joint venture agreements nor partnership with Air France-KLM when they come up for renewal in January 2017.

Silvano Cassano, Alitalia’s chief executive, told employees in a statement that “these agreements are no longer beneficial, either commercially or strategically, to the new Alitalia and its ambitious turnaround plan. They were negotiated when Alitalia was in a very different position, with the result that the agreements in their current forms favour the other party.”

Although, Cassano also said: ““We have indicated to Air France-KLM that we are willing to discuss more equitable arrangements that benefit all the parties involved, but thus far we have been unable to achieve this result. We remain open to further discussions to achieve a mutually acceptable solution.” 

Also in the company statement, Cassano explains that the main problem is that Alitalia is having issues with Air France-KLM not allowing it to make the necessary network changes to help strengthen the airline.

Air France-KLM and Alitalia entered into the joint venture and partnership agreement in 2009 and 2010. Since, Alitalia had dealt with significant financial issues, but the airline plans to return to profitability by 2017.

Part of the transformation the airline has gone through is Etihad taking a 49% stake in the airline which made it the largest stakeholder in the airline. Meanwhile, Air France-KLM has slowly lost most of its stake as it now owns just 1%.

At the moment, it is not clear if this will have any impact with Alitalia’s relationship with the SkyTeam alliance.

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